Rupee depreciation swelled public debt by Rs. 278 b

Central Bank Governor Nivard Cabraal yesterday revealed that depreciation of the rupee last year bloated the country’s public debt stock by a staggering Rs. 278 billion.

He noted that for the full year on a net basis the rupee depreciated by about 10%, but since June 2012 the currency had appreciated by 5.3%.

The latter helped to reduce the value of public debt by Rs. 158 billion.Cabraal also said that the depreciation-led spike in debt stock will see debt to GDP ratio moving back to 81% in 2012, marginally higher than 78.5% figure achieved in 2011. This, however, is far below 102% figure in 2004.

 Forecast is the ratio to come down to 78% this year and to 71% by 2015.

The CB Chief said risk indicators of public debt however have improved at a time when global risk has been rising.