The government of India has prepaid a portion of foreign currency loans of Asian Development Bank amounting to yen 123.11 billion (Rs 5,294.84 crore), keeping in view the strong foreign exchange position and interest rates prevailing in the domestic market.

The government made the prepayment by purchasing necessary foreign currencies from the Reserve Bank of India at the prevailing exchange rate, RBI said in a statement in New Delhi on Monday.

The government prepaid the loans by issuing a new dated security - 5.32 per cent government stock 2014 - to Reserve Bank of India on a private placement basis for Rs 5,000 crore (Rs 50 billion) and paid the balance amount to the central bank out of its cash balance, it said.

The coupon of the security was fixed on the basis on prevailing secondary market yield for 10-year government paper.

Since the fresh Rupee borrowings by government have been used exclusively to retire foreign currency debt of equivalent residual maturity, the transaction does not have any implication on aggregate debt position of the government.