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Rupee gains as crude oil falls over 7%
Why is it in the news ?
- The Indian rupee and bond prices extended gains after crude oil prices slumped to a near 16-month low.
- Also after another open market operation(OMO) announced by the Reserve Bank of India(RBI to purchase OMO worth Rs.50,000 crore).
- The rupee opened at 70.08, rising for the third consecutive session.
More in the news
- 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.
- Year to date, oil prices are down 15.3%.
- They are currently down 34.5% from their 2018 peak of $ 86.29 per barrel seen on 3 October.
- The announcement from RBI for further purchases of government securities for total amount of Rs 50,000 crore also improved sentiment.
- Continued buying interest from foreign investors in both equity and debt also helped the local currency.
- 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?
- 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.
- For India’s external balances, lower oil prices imply some reprieve on the FY19 current account and balance of payments position.
Source
LiveMint.