India's trade deficit shrank to a 10-month low in December as global oil prices tumbled and demand for gold fell, auguring well for Indian current account balance and the rupee. The deficit narrowed by 44 percent from the previous month to $9.43 billion, its lowest since February 2014. The cost of oil imports, at $9.94 billion, fell 15 percent from November.
Oil accounts for nearly a third of India's imports. Global crude prices have plunged more than half since last June, promising windfall gains for Asia's third-largest economy.
The oil-price slide, estimated by the finance ministry to shave 1 to 1.5 percent off India's current account deficit, was a key factor in making it possible for the Reserve Bank of India to announce a surprise interest rate cut on Thursday.
RBI Governor Raghuram Rajan ordered the quarter-point cut between meetings, in a key boost for Prime Minister Narendra Modi's government as it prepares to present its first full budget next month.
Comments
Comments are closed.