Experts anticipate increased pressure on the rupee, possibly reaching 84 against the dollar, due to this cycle, affecting not only crude oil but also electronic goods, semiconductors, and edible oils. Furthermore, the cut in oil production by Saudi Arabia and Russia, followed by an extension of the production cut, has resulted in rising crude oil prices. An increase of $10 in crude oil prices could raise the current account deficit by 0.35%, potentially reducing the GDP growth rate by 0.10-0.15%. Trade deficits, driven by increased crude oil bills, will lead to rising pressure on the rupee’s value against the dollar. This will not only affect crude oil but also the cost of importing high-value items such as gold, semiconductors, and electronic goods.

Source: News 24 October 05, 2023 13:46 UTC