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Govt pre-pays high-cost IBRD loans

NEW DELHI: The Government has pre-paid eight high-cost IBRD loans during fiscal 2000-01. Over the last two years, the Union Finance Ministry has attempted to identify some of the high-cost multilateral loans contracted by the country over a decade ago, a s part of an active external debt management strategy.

In 2000 also, the Government pre-paid part of its portfolio of high-cost fixed interest rate loans from the IBRD, signalling savings of over $20 million.

During the period April 2000 to January 2001, India's external debt service payments' net outflow was higher at Rs 3,647 crore compared to Rs 2,365 crore in the same period in fiscal 1999-2000. The higher outflow has been on account of the pre-payment of the eight IBRD loans. The additional outflow due to this was Rs 580 crore, according to the Minister of State for Finance, Mr Gingee N. Ramachandran.

The Finance Ministry is now in the process of refinancing a part of its high-cost Japanese yen denominated loans. This would mean replacing the costlier debt with relatively cheaper debt. The Ministry is planning to invite quotes from bankers for this tr ansaction. -- Our Bureau