Oil price hike to endanger macro-economic stability

Tribune News Service

New Delhi, February 23

Indian agriculture exports, especially of wheat, rice, maize, will continue to reap better returns as tensions between Ukraine and Russia keep them at elevated levels but a further rise in oil prices will raise macro- stability risks in countries such as India, South Korea, and Thailand, Morgan Stanley said in a report.

India could consider a Rs 5-10 per litre cut in excise duty because the rise in crude prices poses inflationary, fiscal and external sector risks, it cautioned.

The RBI may have to act sooner than expected, possibly in the April policy review, to preserve macro stability and increase the risk of it taking up frontloaded rate increases, Morgan Stanley said.

About The Author

Tribune News Service

The Tribune News Service brings you the latest news, analysis and insights from the region, India and around the world. Follow the Tribune News Service for a wide-ranging coverage of events as they unfold, with perspective and clarity.