The Indian government is likely to prepay up to $1 billion of costly foreign loans during the current financial year (2002-03), a senior finance ministry official said Thursday. India could either prepay the loans through rupee payments or through refinancing of loans at a cheaper interest rate, the official said. "We are very comfortable with our foreign exchange reserve and would also like to take advantage of a falling interest rate regime to prepay the costly loans," the official said.
India's foreign exchange reserves are currently at around $55 billion.
Reserve Bank of India governor Bimal Jalan has also said that India could consider prepaying some of its costly loans in the light of very comfortable foreign exchange reserves. The Indian government's total foreign debt is estimated to be over $100 billion. Bureau Report