Indian Rupee dropped on November 22 weighed on high oil prices and speculation that the Reserve Bank of India will not hesitate to take up monetary measures to ensure price stability.
Deputy governor Rakesh Mohan, Reserve Bank of India (RBI), said that the main objective remains price stability, financial stability and maintenance of growth. All monetary instruments will be used as and when necessary for price stability.
With the crude oil prices rising nearing USD 100 a barrel, Planning Commission`s deputy chairman Montek Singh Ahluwalia said that the burden of rising oil prices in the international market need to be passed to customers and simultaneously protect the interests of the underprivileged.
Sentiments of the investors were affected on speculation that if retail oil prices rise then it may cause inflationary risks and widen the trade deficit.
India`s import bill can increase 5%, if the international oil prices increase over USD 80 a barrel followed by the current account deficit. Further, the unabsorbed prices were hitting the bottom lines of the oil PSUs.
Also the Foreign institutional investors (FIIs) remained net sellers in equities worth Rs 22,224 million (USD 550.90 million) on November 21. They bought equity worth Rs 32,466 million and sold equity worth Rs 54,690 million. Till November 21, they have been net sellers in equities worth Rs 38,395 million.
Indian Rupee closed weak at 39.53/54 a dollar, as against the previous day`s close of 39.390/395.
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