Inflation – Weaking Rupee may elevate commodity prices

Increasing Fed Rates is making India less attractive for dollar investment. This could lead to capital outflows, and coupled with elevated crude oil and commodity prices may depress the rupee further. Even if the global prices remain unchanged, a weaker rupee means India is paying more for its crude and gas imports (Crude import accounts for 85% and gas import accounts for 50%) and thus inflating overall prices.

Source: OutlookIndia

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