Rupee touches all time low, weighs high on CAD

India’s current account deficit (CAD) seems under pressure with rising oil prices and depreciating rupee adding to the worries. The Indian rupee touched an all-time low mark of Rs. 69 per dollar on Friday.

The rising tension across the globe on trade protectionism policies have created turmoil amongst major economies. Rising oil prices have created burden on current account inching the deficit towards 3 per cent mark.

Earlier this month, OPEC decided to increase the output by 1 million barrels per day thereby, easing the pressure on oil prices. However, the increase in oil output was less than anticipated. Further, the trade embargo on Iran has also created supply disruption in the market.

Inflation and rising oil prices have created pressure on the apex bank to continue raising interest rate. Oil constitutes major part of imports. Rising oil prices will benefit oil exploring companies like ONGC and will show negative impact on oil marketing companies.