Israel-Iran War / Rupee destroyed by Iran-Israel war, oil prices on fire

Indian Rupee: The ongoing war between Iran and Israel has created a wave of concern globally and its direct impact is now visible on India's economy as well. As the war is getting more serious, weakness is clearly visible in Indian economic indicators. After the US attack on Iran's nuclear bases, there has been a tremendous jump in oil prices internationally, causing turmoil in the domestic markets.

Rise in oil prices

The price of Brent crude oil has risen by two percent to $ 77.27 per barrel. India, which imports a large part of its energy needs, the increase in crude oil prices has a direct impact on its current account deficit and inflation. In the coming time, the increase in the prices of gas, diesel and petrol can put a direct burden on the pocket of the common man.

Rupee slips against dollar

The rupee fell 17 paise to 86.72 against the US dollar in the interbank foreign exchange market on Monday. It closed at 86.55 on Friday. The rupee has come under pressure due to the strength of other global currencies against the dollar and the surge in oil prices. However, foreign capital investment and increase in foreign exchange reserves have limited the decline slightly.

Significant fall in stock market

The domestic stock market was also not untouched by this geopolitical tension. The BSE Sensex fell sharply by 705.65 points during early trade on Monday and reached 81,702.52. At the same time, the NSE Nifty also fell 182.85 points to 24,929.55. Investors' concerns are increasing as global uncertainty has affected investment sentiment.

Minor relief in foreign exchange reserves

A relief news is that according to the Reserve Bank of India, India's foreign exchange reserves have increased by $ 2.294 billion to $ 698.95 billion in the week ended June 13. This may help to some extent in maintaining stability in foreign transactions.

What next?

Experts believe that if the Iran-Israel war does not end soon, then the pressure on gas prices, stock market and rupee in India may increase further. In such a situation, the Reserve Bank and the Government of India will need to take decisive and timely steps to maintain economic stability.