Crude Oil Price Down / Amid India-Pakistan tension, great news has come from US-Gulf countries

Crude Oil Price Down: While on one hand the tension between India and Pakistan is at its peak, on the other hand, an economic news from America and Gulf countries has raised hopes of relief for India. This news is not only giving positive signals for the Indian economy, but can also strengthen the position of the rupee. India's currency market was closed on Thursday due to Labor Day, but when the market opens on Friday, the rupee can be seen rising like a rocket against the dollar.

What is the good news?

In fact, there has been a tremendous decline in the prices of crude oil in the international market. Brent crude oil of Gulf countries has now come down below $ 61 per barrel, while the price of American crude oil has slipped below $ 58 per barrel. The main reason behind this decline is the weakening economy of America and the possibility of a possible recession. According to experts, for the first time in three years, there has been a quarterly decline in the US economy, due to which global demand is expected to weaken.

Why is this beneficial for India?

India imports about 80% of its crude oil needs. When crude oil prices fall, India's trade deficit improves, which reduces pressure on foreign exchange reserves and strengthens the rupee. In the last one month, the price of Brent crude has fallen from $75.47 to $60.48 per barrel - a decline of about 20%. Similarly, US crude (WTI) has also fallen from $72.28 to $57.57 per barrel.

Rupee strengthens

Due to the fall in crude oil prices and increased foreign investment, the rupee has strengthened significantly against the dollar in the last few days. In the last session, the rupee closed at 84.54, which is the highest level in five months. At the same time, compared to the record low of 87.997 in February, it has strengthened by about 4% so far. When the market opens on Friday, experts believe that the rupee can show strength of more than 50 paise and reach near the level of 83.

Eye on dollar index

However, the dollar index has crossed the level of 100, which is usually a challenge for the currency of emerging economies. But this time the situation is different, because the fall in oil prices is working in India's favor and investors' confidence in the Indian market remains intact.