Despite record forex reserves, India's external finances at risk: UBS

The rupee is already among the worst performing currencies in Asia this year as foreigners pull money out of bonds and inflows into stocks slow

India’s record foreign exchange reserves somewhat mask the country’s vulnerability on its external finances. That’s the takeaway from a note by UBS Group AG’s India economist Tanvee Gupta Jain.

Foreign exchange reserves at $421 billion cover 81 percent of external debt as of September 2017 and less than 11 months of imports. That’s down from 138 percent of debt before the global financial crisis and 14.4 months of imports in the 2008 fiscal year, respectively, according to the UBS note.

“India remains vulnerable in its external position and risks are rising on the margin,” Jain wrote in the note. “There