Turkish financial crisis deepens sparking fears of a global contagion & Rupee breaches 70 levels

11th Aug – 17th Aug

1. Depreciation in Rupee to hike India’s import bills

Aug 17, 2018

The Domestic Crude Oil import bill is likely to jump by about USD 26 billion in 2018-19. The Indian rupee dropping to a record low has made buying of oil from overseas costlier. India imports over 75%-80% of its oil needs; India imported 220.43 million tonnes of oil in the year 2017-18, while oil imports are going to increase to 227 million tonnes during 2018-2019.

Source: PTI-News.

2. Rupee crossed 70 against the US Dollar for first time on US trade war with China

Aug 17, 2018

US Dollar continued to appreciate with investors and rupee lost ground, fearing a global trade war. With the US Federal Reserve on a rate hike mode, foreign investors are likely to leave emerging markets even after the Turkish Lira hangover ends.

Source: DNA

3. Indian market reacts negatively after Turkey turmoil

Aug 17, 2018

Indian rupee lost to the US dollar and other major currencies and the domestic equity markets slid marginally, as Turkish Lira lost almost 75% in the last 4 months. Nifty closed to 11,400 while Sensex closed to 37,663 on Thursday.

Source: The Hindu

4. Agri exports are predicted to increase as Rupee slides

Aug 16, 2018

Indian farmers are likely to benefit from getting higher prices for their produce, but the economy may suffer from accelerating inflation with imports too getting expensive - a weak rupee isn’t all that bad for agriculture commodities. India grows export oriented crops such as basmati rice, groundnut, soya-bean, cotton and mentha oil.

Source: ET

5. Gold slides following global trade

Aug 16, 2018

Domestic Gold prices fell to their lowest levels since January 2017 following global markets as the US dollar Index hit new highs which has had a negative impact on US Commodities. Gold is the worst performer during this tenure. Spot gold was trading near 1,187.25 on 15th August 2018.

Source: ET

6. Oil prices slowing on weak growth outlook from India and China

Aug 16, 2018

China and India are growing more slowly than expected, resulting in weak oil demand from Asia’s biggest importers. The two countries buy a combined 12 percent of the world’s oil, and their growth has helped drive the recovery in oil prices since 2016.

Source: Reuters

7. India a net importer, is more affected by rupee slide then benefiting

Aug 15, 2018

India as an emerging market is affected badly and being a net importer of global commodities like oil, the Current Account Deficit (CAD) widens as the rupee slides against the US dollar. This is not surprising; India’s imports exceed its exports. The rupee’s depreciation makes imports costlier, pushing up operating costs for companies and household budgets.

Source: Business Standard

8. India may reduce oil imports by half to get US waiver

Aug 15, 2018

India which is the second biggest importer of Iran crude oil may reduce it by half or 50% to get the US waiver. U.S. had discussed the issue of a conditional waiver on sanctions in talks last month in New Delhi and India has already expressed its inability to scrap oil imports from Iran completely as its supplies are being offered at competitive rates.

Source: Bloomberg