Slide may hit anti-inflation moves, put pressure on current a/c deficit

Macro Eco Robust Enough To Tackle Short-Term Shocks

- Surojit Gupta

New Delhi: The rupee’s slide may have some implication for inflation management. But overall, the macroeconomic fundamentals of the economy remain robust to deal with short-term shocks.

For now, the most crucial impact would be on inflation as the country imports nearly 80% of its crude oil needs. This would mean that imports would become costlier and travel through the value chain to raise input costs. While retail inflation has shown some signs of moderation in recent weeks, the rupee depreciation may impact the overall inflation situation. Slowing of commodity prices may also help cushion the impact.