• 3 minutes UAE says four vessels subjected to 'sabotage' near Fujairah port
  • 6 minutes Why is Strait of Hormuz the World's Most Important Oil Artery
  • 8 minutes OPEC is no longer an Apex Predator
  • 12 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 2 hours Canada's Uncivil Oil War : 78% of Voters Cite *Energy* as the Top Issue
  • 2 hours Australia Sky News Election Summary: "This was the Climate Change Cult Election, and the Climate Change Cult Lost"
  • 6 hours China Downplays Chances For Trade Talks While U.S. Plays ‘Little Tricks’
  • 6 hours California Threatens Ban on ICE Cars
  • 21 mins Australian Voters Reject 'Climate Change' Politicians
  • 6 hours IMO2020 To scrub or not to scrub
  • 10 hours Global Warming Making The Rich Richer
  • 6 hours Did Saudi Arabia pull a "Jussie Smollett" and fake an attack on themselves to justify indiscriminate bombing on Yemen city population ?
  • 7 days How can Trump 'own' a trade war?
  • 7 days China, U.S. Hold 'Productive' Trade Talks In Beijing
  • 2 hours Some Good News on Climate Change Maybe
  • 6 hours Wonders of Shale- Gas,bringing investments and jobs to the US
  • 7 hours "We cannot be relying on fossil fuels to burn as an energy source at all in our country" - Canadian NDP Political Leader

India’s Currency Hits Record Low Vs. Dollar On Rising Oil Prices

Dollar Rupee

India’s currency, the rupee, hit a new record low against the U.S. dollar on Thursday on the back of rising oil prices, end-month demand for dollars, and concerns about the health of the emerging markets after the Turkey crisis.

The rupee slumped to an all-time low of 70.81 against the dollar, beating the previous record low from just yesterday—70.475, for a total 10.97-percent depreciation since the beginning of this year.

Rising oil prices and the weakening currency have already created a perfect storm for India, where oil demand growth has been surging, but the higher oil prices are increasing the country’s spending on crude oil imports, which account for 80 percent of Indian oil consumption.

As early as in May this year, India’s Petroleum Minister Dharmendra Pradhan pleaded for “stable and moderate” prices with Saudi Arabia’s Energy Minister Khalid al-Falih, as Brent Crude prices briefly broke above $80 a barrel, sending gasoline and diesel prices in India surging to a five-year-high, also due to a weakening rupee against the dollar.

Earlier this week, economists told CNBC that they expect the Indian currency to further slide by the end of this year, widening India’s oil import bill and deteriorating its trade deficit and current accounts.

“The net trade oil deficit has widened considerably, owing to a combination of high oil prices and a weak currency,” DBS economist Radhika Rao told CNBC.

A cheaper rupee could increase India’s crude oil bill by as much as US$26 billion in the financial year 2018/19, ending March 2019, according to Indian government officials.

Although India’s economic growth continues to be robust, higher oil prices and rising interest rates are raising pressure on India’s budget and current account, Moody’s said in a report on Wednesday.

“Higher oil prices and interest rates will put pressure on the government’s budget and the current account. However, growth prospects remain in line with the economy’s potential, around 7.5% this year and next,” Joy Rankothge, a Moody’s Vice President and Senior Analyst, noted.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News