The oil crash couldn't have come at a better time for India's Rupee. With so many negatives around, oil plunge comes as a saviour for Indian Rupee as it bounced back around 2% from it's record low last month. The situation could've been much worse had it not been for the oil plunge.
Forecasts suggest Indian Rupee could gain another 1-1.2% by year end. This plunge in oil prices could translate to $40 billion, thus balancing the nation's current account, according to Bank of America.
The Indian government has taken measures to increase excise duty on Petrol and Diesel by ₹10 and ₹13 respectively which will be beared by Oil Marketing companies. No impact on prices at retail pumps to be seen. This move will ease the increasing burden on the government tax collection as demand for fuel consumption has gone down amid Nationwide lockdown which led to loss of a huge amount of government tax collection.
The government will report key data including industrial production this week, all of which will probably show a collapse in activities.
The data will sharpen the focus on another deficit figure -- the burgeoning fiscal gap as Prime Minister @narendramodi spends to cushion the economic fallout. Citigroup Inc. estimates the nation’s budget deficit to widen to 8% of GDP this year, compared with a budgeted 3.5%.
Source - Bloomberg