Kolkata, Nov. 20 India has not only reduced its investments in US Treasury bonds between May and September, but stood least exposed among the other BRIC nations relative to their respective foreign exchange reserves.
According to the latest data released by the US Department of Treasury on November 17, as on September 30, India’s investment in the US bonds at $35.90 billion was the lowest among all BRIC nations.
China’s investment in the bonds remained the highest at $798.9 billion. Brazil’s exposure was $144.90 billion, followed by Russia at $121.80 billion.
In terms of percentage of exposures to the US bonds to each of these economy’s total foreign exchange reserves also, India was the lowest. India’s exposure to US bonds was 12.81 per cent of its forex reserves of $280.34 billion in September compared with 64.63 per cent of Brazil, 35.15 per cent of China, and 29.46 per cent of Russia.
India’s forex reserves and US bond investments ratio improved during the period between May and September this year as its forex reserves went up.
In May, the ratio was 14.79 per cent on the forex reserves of $262.31 billion.
Mr Jagannadham Thunuguntla of SMC Capital said: “With less exposure to US treasury bonds, India stands least vulnerable to US dollar depreciation in comparison to its BRIC peers”.
The current trend showed that though China and Russia too reduced their vulnerability ratio during May-September, Brazil increased it, Mr Thunuguntla said.
Brazil has forex reserves worth $224 billion, while Russia has $413.45 billion. China has $2,272 billion foreign exchange reserves.
Source : Business Line