Rs 600 billion revenue deficit, oil price spike can undo the goods in economy
The Economic Times November 27, 2017 The past fortnight has been quite eventful in the context of its medium-term impact on the currency and interest markets in India. Moody’s upgraded India’s credit rating from Baa3 to Baa2 with stable outlook. The immediate impact has been observed in the renewed interest in the capital markets where the indices have recovered their earlier losses that had crept in due to profit booking, economic recovery in developed markets leading to minor flight of capital and sudden rise in crude oil prices. NIFTY closed at 10390 by the week end. The crude oil prices have risen by 34% y-o-y as in the middle of November from $48 per barrel in Nov’16 to $64 by Nov’17. The oil price was as low as about $52 per bbl till about 2 months ago. This had led to a sharpBSE 4.92 % rise in yields across the curve with 10 year benchmark GSec quoting above 7%. The latest weekly statistical supplement data of RBI as on November 17, 2017 suggests forex re