The foreign exchange reserves rose to a record $85.4 billion as on August 15 even as India's external debt increased by $5.5 billion from $98.8 billion in March 2002 to $104.2 billion at the end of March 2003.

This is in spite of a prepayment of high cost foreign currency loans of $3.03 billion to the Asian Development Bank and World Bank during the last quarter of 2002-03.

The increase in external debt was mainly owing to an increase in non-resident Indian deposits of $6.8 billion and mainly concessional bilateral debt of $1.5 billion.

The total concessional debt increased by $3.1 billion. The central bank said the rise in NRI deposits is partly owing to the shifting of non-repatriable rupee accounts to repatriable accounts.

India now boasts of holding the sixth-largest international reserve assets among emerging markets. The foreign exchange assets of the Reserve Bank of India stood at $85.4 billion as on August 15.

India was ranked the seventh largest in terms of accretion of foreign currency assets by $10 billion over the end-March 2003.

The foreign currency assets increased to $71.890 billion in March 2003 from $6.434 billion in March 1993.

This is even as gold showed a marginal rise from $3.380 billion in March 1993 to $3.534 billion in March 2003.

The total gold holdings of RBI was at 357 tonne, of which 65 tonne or 18.2 per cent are held abroad. RBI said that the holdings of gold remained virtually unchanged and gold reserves are managed passively.

In its annual report, RBI said the major sources of accretion to foreign currency assets were the current account surplus and inflows from foreign investment, banking capital and non-resident deposits. The valuation gains owing to the cross currency movement in exchange rates was at $3.8 billion.

As far as external debt is concerned, bilateral and multilateral debt constituted 45 per cent of the debt stock.

External commercial borrowings at 21.3 per cent and long-term non-resident deposits at 22.5 per cent are the other principal components of external debt.

The government has decided to discontinue receiving aid from bilateral partners other than Japan, UK, Germany, US, EC and the Russian Federation.