A rise in global crude oil prices usually brings with it a host of problems for the Reserve Bank of India (RBI). Ergo, the central bank is loath to see rising oil prices and it should be. However, there is an unlikely benefit from rising crude oil prices in the present context. One of the reasons that the central bank may have slowed down its intervention could be the narrowing of the current account surplus. The widening of the trade deficit in recent months shows that the current account surplus is on its way down.

Source: Mint March 07, 2021 18:45 UTC