The rupee fell past 72 per dollar to a record low on Thursday, amid a deepening emerging market contagion and the risk of a wider current account deficit. Merchandise trade deficit expanded to $45.7 billion in the June quarter against $41.6 billion in the March quarter as crude oil prices zoomed past $75 per barrel. The subdued remittance flow from Gulf countries last year because of lower oil prices has reversed. “Elevated oil prices contributed nearly 50% of trade deficit in the June quarter,” Pant said. Aditi Nayar, principal economist at Icra Ltd, said higher oil prices offset the benefit of contraction in gold imports as well as a healthy rise in remittances.

Source: Mint September 07, 2018 12:48 UTC