BNY’s Bob Savage reports India is considering emergency steps to protect foreign exchange reserves as higher Oil prices widen the current account deficit. Measures under discussion include fuel price hikes, import restrictions on Gold and electronics, and tighter hedging rules. The Reserve Bank of India (RBI) has already intervened to stabilise the Indian Rupee (INR) after it hit a record low, with reserves near $691bn.

Policy toolkit aimed at Rupee stability

"India is considering emergency measures to protect foreign exchange reserves amid rising oil prices and a widening current account deficit."

"Proposed steps include hiking fuel prices for the first time since the Iran conflict began, restricting non-essential imports such as gold and electronic goods, and encouraging public fuel conservation."

"Prime Minister Narendra Modi has urged citizens to avoid gold purchases for a year and to limit overseas travel."

"The Reserve Bank of India (RBI) has intervened to stabilize the rupee, which hit a record low, and may tighten currency hedging rules for importers."

"Foreign exchange reserves stood at $690.7bn as of May 1."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)