Current account surplus at $8.7 bn

Net capital account flows in 2003-04 was at $22.121 billion as against $12.113 billion in 2002-03. The ‘‘unprecedented’’ flows were due to an upgradation of sovereign credit rating to investment status by international rating agencies.

India’s trade deficit increased during the same period to $16.706 billion ($12.910 billion).

Country’s total external debt stock increased by $7.4 per cent to 7.7 billion in the fiscal 2003-04 over the preceding fiscal. However, measured in rupee terms, the stock of debt recorded a decline of 1.9 per cent over March 2003.

The major portion of the increase in external debt may be attributed to valuation changes on account of the depreciation of the dollar against other major international currencies, the RBI said. Valuation changes, reflecting the appreciation of the euro, pound-sterling, and yen against the dollar accounted for $5.4 billion of accretion to total reserves in 2003 as against a valuation gain of $4.4 billion in 2002-03. The RBI added that the stock of external debt at the end of March 2004 was broadly at the March 2003 level. Among other debt components, bilateral debt and short term trade credits — reflecting a pick up in import demand — recorded an increase, the RBI.

Key indicators of external debts, i.e., debt to GDP ratio, ratio of short term to total debt and short-term to foreign exchange reserves have shown continuous improvement over the years, the RBI said.