Israel-Iran War / Middle East battle attack on rupee, why got a big defeat in 1 month?

On June 12, Israel attacked Iran's 4 nuclear lab, leading to the global market. On Friday, the rupee fell 60 paise to 86.20/$ 1. Crude oil became 10% expensive. If the war goes on long, there is a possibility of further decline in the rupee and inflation.

Israel-Iran War: On June 12, Israel launched a major military attack on Iran, which has created an economic movement globally. In this attack, Iran's four major nuclear labs were targeted and many top military officers and nuclear scientists were reported to have been killed. This incident has not only put West Asia in crisis, but has had a profound impact on developing countries like the entire global economy, especially India.

Stirred in global market, India's currency waiver

This struggle of Israel-Iran has a direct impact on the stock markets around the world. There is an atmosphere of fear among investors amid uncertainty and fear of war. Its biggest impact in India was seen on rupee. On Friday, the Indian rupee fell by 60 paise to Rs 86.20 per dollar against the US dollar, which is believed to be the biggest decline of the last one month.

Did RBI take the situation?

However, at the end of the day, the rupee saw some strength and it closed at Rs 86.08 per dollar. Experts believe that this reinforcement has come due to the Possible intervention of the Reserve Bank of India (RBI) and the sale of dollars by some foreign banks. Despite this, the weakness of the rupee indicates that if the tension in West Asia increases further, the rupee is possible further in the coming days.

Crude oil prices rise by 10%

Due to this crisis, the prices of Brent crude oil in the international market also jumped. While crude was $ 68 per barrel on Thursday, it increased to $ 75 per barrel on Friday. This is an increase of about 10%. Countries like India, which meet a large part of their energy requirements with imported oil, are directly affected by this price increase.

Economic signs: Current account deficit and risk of inflation

Analysts say an increase in crude oil prices every $ 10 can increase India's current account deficit to 0.4% of GDP and uproar can increase by 35 basis points in retail inflation. This means that the price of petrol and diesel is fixed in the coming days, which will increase the cost of transport and other essential commodities and increase inflation.