$1 Crude Price Increase - Indian economy ImpactIt is worth mentioning here that even a marginal increase in oil price has a great impact on the Indian government's finances. We have analysed the impact of a one-dollar rise in the price of oil and it leads to a $1.3 billion (Rs 7,840 crore) increase in the government's subsidy bill.
The value of the rupee is connected to India's current account deficit. Any increase in the deficit would be a rise in rupee-selling and dollar-buying. This leads to a fall in the rupee. Worries about the impact of a high oil price on India's CAD caused the rupee to fall to Rs 60.55 per dollar, the lowest since April 29 on Tuesday. However, the Reserve Bank of India (RBI) governor, Dr. Raghuram Rajan, reassured investors that India is in a much better position to deal with shocks. The RBI has been shoring up its reserves the last few months by buying dollar whenever the rupee gained.
So, it is Indian interest that oil remains in some stable zone as it affects our economy considerably. You can get daily free crude tips here.