The report noted, "If the crisis persists, it could have material implications for the exchange rate and the current account deficit and could stoke inflationary pressures."
After a rebound the previous session, Indian stock indices traded again in the red on Friday, ending the week on a weak note amid tensions in West Asia.
The bearish dominance returned to the Indian stock markets on Friday's opening session as both benchmark indices opened in the red, with rising crude oil prices continuing to influence investor sentiment.
Every USD 10 per barrel increase in global crude oil prices could reduce India's GDP growth by about 0.5 per cent and add pressure on economic activity, inflation and currency stability, given the country's heavy reliance on imported crude, Vandana Bharti, Research Head - Commodity, SMC Glob
India's external sector outlook remains broadly manageable but faces rising risks from geopolitical developments in West Asia that could push up crude oil prices and widen the current account deficit (CAD), according to a recent research note by Yes Bank. The report noted that India recorded
The Indian rupee recovered on Thursday after hitting an all-time low of 92.31 against USD, though currency experts believe the domestic currency is likely to remain under pressure due to ongoing geopolitical tensions and elevated crude oil prices.
Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, on Wednesday stated that with crude oil prices remaining elevated, the rupee is likely to face continued depreciation pressures.
Crude oil prices may surge above the USD 100 per barrel threshold if there is any structural disruption to oil infrastructure amid the ongoing military escalations in West Asia, according to a report by ICICI Bank.
The escalation of the Israel-Iran conflict, marked by the reported killing of Iran's Supreme Leader Khamenei, is set to impact Indian equity markets through trade flow disruptions and a spike in crude oil prices.
Brent crude prices have surged around 10 per cent amid escalating tensions in the Middle East following ongoing military confrontation between Iran and the United States after the killing of Iran's Supreme Leader Ayatollah Ali Khamenei.