India: Current account under threat if oil surge continues: RBI

  • India’s current account and fiscal deficit could take a hit if oil prices continue to rise after an attack on Saudi Arabian oil facilities over the weekend, the central bank chief said on 16 Sep 19.
  • “We should allow a few more days to see how the situation plays out before taking a final view…depending on how long it persists it will have some impact on the current account deficit and further perhaps on the fiscal deficit if it lasts longer,” Governor Shaktikanta Das said.
  • U.S. officials blamed Iran for the attack, which damaged the world’s biggest crude oil processing plant and led to a 19% surge in oil prices. Iran denied blame and said it was ready for “full-fledged war.”
  • Das said the monetary policy committee would continue to focus on growth with inflation expected to stay within the medium term target.
  • “The numbers definitely look much worse. The number of 5% is a surprise. We are analysing why exactly it has happened,” Das told CNBC TV18.
  • “Growth now is a matter of highest priority, especially with inflation remaining within 4%,” he added.

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