Indian policymakers are breathing a sigh of relief. Contrary to expectations earlier this year, when oil prices were forecast to touch $100 per barrel, crude rates have fallen 25 percent (since early October) to around $65 now. Falling oil prices will relieve some pressure on the current account deficit and the rupee, and bring some stability to the economy.
Part of the reason why oil prices shot up in the first place was the US sanctions on Iran, the fourth largest oil producer. That was expected to have taken away a substantial amount of oil from the world market.
However, that hasn’t happened with US President Donald Trump agreeing for a 180-day waiver to China, India and six other countries who account for more than 75 percent of Iranian exports. Read More