More uncertainty with rupee's slide

The higher price of crude oil and the falling rupee, coupled with looser fiscal policy, might have inflationary impact

Last Tuesday, the commerce ministry said the trade deficit for July was estimated at a little above $18 billion, as against one of nearly $11.5 bn during July 2017. On the same day, the rupee depreciated to around 70 to a dollar, weakening by almost 1.9 per cent in only two trading sessions. On Thursday, it fell further, before a modest recovery on Friday morning.

The rupee’s depreciation was partly due to global turmoil in currency markets. Turkey’s lira lost around 40 per cent and all emerging market currencies bore the brunt of money flowing to safe havens in the