FinMin flags $116 oil, rupee pressure as risks to economy
India’s Finance Ministry has flagged the oil price surge and rupee pressure as key risks to the economy. The warning came in its September Monthly Economic Review.
India’s average imported crude basket surged to 116.04 dollars a barrel in September. That is up 28.66 percent from 90.19 dollars in August, and the highest since the US-Iran conflict began in February.
The review said global conditions have turned unfavourable again. Oil prices spiked, global bond yields moved sharply higher, and the rupee came under pressure.
The rupee slipped past the 96 level against the dollar this week before RBI intervention steadied it. Foreign investors pulled out 3.7 billion dollars from Indian equities and bonds in September.
The ministry said growth momentum stays strong, but attracting capital flows will be a stiff challenge for India and other developing nations.
Brent crude climbed above 107 dollars a barrel amid Middle East supply disruptions. The rupee opened 3 paise lower at 95.97 per dollar on Thursday. The review noted that long periods of stability can breed risk-taking and urged vigilance.
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