RBI releases International Investment Position

Published: July 1, 2020

On June 30, 2020, Reserve Bank of India released its data on International Investment Position, IIP.

Highlights

According to the data, the direct investment in the country rose by 19 billion USD and the portfolio investment declined by 13.7 billion USD. Also, the international financial assets of Indian residents have increased by 73.9 billion USD.

What is IIP?

The IIP of a country is a financial statement that provides value and composition of its external financial assets. A positive IIP says that the nation is creditor and a negative IIP says that it is debtor.

Significance of External Financial Assets

The External Foreign Assets determine the value of a nation’s currency greatly. When the currency appreciates, the value of foreign assets decreases. When the currency depreciates, the value of foreign assets increases.

Therefore, if a country is net debtor, currency depreciation will raise its burden of foreign currency debt.

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