New Delhi: With a stable Rupee and over $ 85 billion in FOREX (foreign exchange) reserves, government is planning to prepay foreign loans worth over $ three billion to reduce its interest burden and fiscal gap.

"It (prepayment of foreign debt) will be much more than what we did last fiscal," Finance Secretary D C Gupta said on the sidelines of the India-ASEAN Business Summit on September 5.

Finance Ministry is processing external debt portfolio and the high-cost debts would be short listed accordingly.

Government would raise resources from the domestic market to prepay the foreign loans, Gupta said.

Last fiscal, government prepaid high-cost loans slightly less than $ three billion taken from World Bank and Asian Development Bank.

The prepayment of costly foreign debts along with the buy-back of securities and debt swap of state loans would reduce the Centre's interest burden, now at Rs 1,23,200 crore.

Gupta said the prepayment would continue as the country's FOREX reserves position was comfortable at over $ 85 billion.

To a query, he said the rupee was stable and was getting stronger.

"There is quite a bit of stability in the Rupee," he said. The exchange rate, now at about Rs 46 a Dollar, had improved significantly in the last few months.

Gupta declined to give a long-term target for the Rupee value saying, "It is more or less market- determined now. That is why the Rupee is getting stronger. It is difficult for even RBI governor to say how the Rupee is going to behave."

PTI