With rupee falling to a one year low in the past three days, RBI Governor Y V Reddy on Thursday said the situation is reflective of the "global uncertainties".The uncertainties "were flagged and analysed in the RBI policy statement last week. We have discussed the impact of the uncertainties in India," Reddy said after a board meeting of the RBI.
Though the governor did not specify the "uncertainties", he was inevitably pointing at the rising oil prices and slowdown in capital inflows.
The rupee hovered near a one-year low of 41.69/70 against the US Dollar on Thursday, as record oil prices drove up demand for the greenback from refiners and other importers, and fund inflows into a tepid stock market slowed.
Close on the heels of the currency fall, the current account deficit is likely to deteriorate marginally from the consensus estimate, Reddy said. "The widening of trade deficit due to the oil prices could be bridged by capital flow, which, despite showing a decreasing trend, can comfortably finance the deficit." Oil, India's biggest import, traded above $123 a barrel close to its record high on Wednesday.
© Copyright 2008 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.
|
Advertisement
Email this Article 
Print this Article