There are very few positives for India’s rupee at the moment, the plunge in crude oil prices is a major one.
Cheaper oil could translate into $40 billion of savings for India, balancing the nation’s current account, according to Bank of America. The last time the nation posted a current-account surplus was in 2004.
As crude prices tanked, it brought relief for the world’s third-largest oil consumer. The rupee rebounded about 2% from a record low touched last month, with a Bloomberg survey of analysts forecasting that it could rise another 1% by year-end to reach 74.74.
“With so many negatives around, the rupee’s trajectory could have been much, much worse had it not been for the big slump in oil prices,” said Dushyant Padmanabhan, strategist at Nomura Holdings Inc. in Singapore. It’s unlikely to be a straight path for the rupee, he said.
