Contact Your Financial Adviser Money Making MC
10 May 2018
 |
Rupee
(The Total Investment & Insurance Solutions)
Ballooning trade deficit, rise in crude oil
prices, coupled with the expectation of the US Fed hiking its rate further is
putting pressure on the rupee that will widen FY19 trade deficit to 4-year high
of 6.4 percent of GDP or $178.1 billion, said a report. “Widening trade
deficit, escalation in commodity prices, particularly oil, coupled with the
expectation of the US Federal Reserve raising its rate further, is exerting
pressure on the rupee. Even other emerging market currencies are facing
headwinds. Rupee has depreciated below INR67/USD mark in May 2018 from the high
of INR63.35/USD in January 2018,” India Ratings report said.
The trade deficit was recorded at $156.8 billion or 6 percent of GDP in
FY18 due to rise in oil and gold imports. The estimates released by the Indian
Ratings report come amid depreciation in the rupee against the dollar, wherein
it has lost over 5 percent to breach the Rs 67-mark to the dollar.
The external trade has emerged as an important component in the growth
engine of India. The external trade accounted for 55.8 percent of India’s GDP
in FY13. Nevertheless, scenario changed due to slowdown in global growth and
rising protectionism post FY13. As a result, contribution of trade to India’s
GDP declined with private consumption and government spending supporting the
growth momentum. Based on FY18 estimates, trade contribution to economy
decreased to 40.6 percent. The Total
Investment & Insurance Solutions
No comments:
Post a Comment