New Delhi: The statements given by the financial experts and economic experts a few days back now look turning into reality as the price of crude oil increased at the top level, and the value of the Indian currency has decreased.
Crude oil prices have risen to a 13-year high of USD 130 per barrel, while the rupee’s value versus the dollar has fallen to Rs 77.
India, a net importer, is in a dangerous position as a result of the rise in crude oil prices while petroleum prices soared to a 13-year high of USD 130 per barrel, the rupee fell to a low of Rs 77 to the dollar. If the current trend continues, these two key worries are projected to have a big and negative impact on the economy. Experts predict that crude oil at $100 a barrel and other commodity shocks in FY23 might shave up to 80 basis points off real GDP growth, bringing it below 7 percent for the first time.
According to Media reports depreciation of the rupee produces higher imported input costs and consequently greater imported inflation; higher cost of external debt; and a slight stimulus to exports and growth. The depreciation may also tighten the RBI’s Foreign exchange policy intervention stance, causing INR liquidity to be drained.
A large drop in a short period of time could cause financial sector jitters, and in extreme situations, it could lead to an increase in interest rates.
(SMIT SONI)