New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    Most of the debt held by India are:

    A Rupee denominated Correct Answer Incorrect Answer
    B Long-term Correct Answer Incorrect Answer
    C In private sector Correct Answer Incorrect Answer
    D Both a and c Correct Answer Incorrect Answer
    E Both b and c Correct Answer Incorrect Answer

    Solution

    Most of the debt held by India are: In private sector- Around 80% of the debt are taken by private sectors trough various means such as External Commercial Borrowing (ECB), Bonds etc. Long term- About 85% of our debt are long-term. This means there is no urgent need to repay the principle. Also the interest rate on long term bonds are generally lower. Dominance of short term loan always creates stress on forex reserve. Dollar denominated- Most debt are dollar denominated which means those have to be repaid (both interest and capital) in dollar. 

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