RBI Policy
Crude price assumption lowered to $80 a bbl for projections
This story was originally published at 13:06 IST on 9 October 2024
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NEW DELHI – The Reserve Bank of India has changed its assumption for the price of India's crude oil basket to $80 a barrel for Oct-Mar for projections, as compared to the earlier assumption of $85 a barrel for the current financial year, the central bank said in its October Monetary Policy Report on Wednesday.
"While global growth uncertainties on the demand side and geopolitical tensions on the supply side impart significant volatility to the outlook, easing global demand-supply refinery divergences have reduced the wedge between global petroleum product prices and crude prices," the report said.
Prices of Brent crude oil have jumped almost 10% so far this month, topping the $80-per-barrel mark for the first time since August on Tuesday, amid escalating geopolitical tensions in West Asia. India's crude oil basket price was at $78.73 a barrel as of Tuesday.
The central bank also revised its assumption of the rupee's exchange rate to 83.50 per dollar for the second half of the current financial year, from the earlier assumption of 83.00 per dollar for the full year. So far in FY25, the Indian currency has depreciated 0.6% against the dollar. It hit a record low of 83.99 a dollar on Sept. 5.
Other than crude oil prices and the exchange rate, all other assumptions underlying the RBI's projections underwent only minor changes, if any. Below is the RBI Monetary Policy Report baseline assumptions for projections of various indicators:
| Indicator | April 2024 | October 2024 |
| Crude Oil (Indian basket | $85 per barrel during FY25 | $80 per barrel during Oct-Mar |
| Exchange rate | 83 a dollar during FY25 | 83.5 a dollar during Oct-Mar |
| Monsoon | Normal for FY25 | Normal for FY26 |
| Global growth | 3.1% in 2024, 3.2% in 2025 | 3.2% in 2024, 3.3% in 2025 |
| Fiscal deficit (per cent of GDP) | To remain within Budget Estimate FY25 Centre: 5.1 Combined: 7.7 |
To remain within Budget Estimate FY25 Centre: 4.9 Combined: 7.3 |
| Domestic macroeconomic/ structural policies during the forecast period | No major change | No major change |
End
US$1 = INR 83.96
Reported by Pratiksha
Edited by Vidhi Verma
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