Why is it in the news ?
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The Indian rupee and bond prices extended gains after crude oil prices slumped to a near 16-month low.
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Also after another open market operation(OMO) announced by the Reserve Bank of India(RBI to purchase OMO worth Rs.50,000 crore).
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The rupee opened at 70.08, rising for the third consecutive session.
More in the news
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Crude oil prices fell over 7% to hit a low last seen on August 2017 amid concern over a supply glut and pessimism on demand due to the trade war and slowing global economic growth.
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Year to date, oil prices are down 15.3%.
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They are currently down 34.5% from their 2018 peak of $ 86.29 per barrel seen on 3 October.
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The announcement from RBI for further purchases of government securities for total amount of Rs 50,000 crore also improved sentiment.
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Continued buying interest from foreign investors in both equity and debt also helped the local currency.
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In November, FII bought a combined of $1.76 billion and so far December they bought $677 million in equity and debt.What Experts say?
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Lower oil is a clear positive for the Indian economy, even though the domestic fuel tax structure only allows partial pass-through of the sharp correction in international benchmarks.
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For India’s external balances, lower oil prices imply some reprieve on the FY19 current account and balance of payments position.
Source
LiveMint.