As INR hits record low, Modi optimistic about economic fundamentals, reserves

MUMBAI: The fundamentals of the Indian economy are strong and the country has adequate availability of petroleum, fertilisers and coal to weather trade and energy disruptions caused by the US-Israel war on Iran, Indian Prime Minister Narendra Modi told parliament’s lower house on Monday.

The conflict, which began last month, has disrupted sectors from air travel to shipping and gas supplies, including by the near-closure of the Strait of Hormuz, which serves as a conduit for 40 per cent of India’s crude oil imports.

His statements comes as the Indian rupee fell to a record low of 93.84 against the US Dollar, eclipsing its previous low of 93.7350 hit on Friday. The rupee, among the currencies most exposed to sustained oil price increases, has weakened about 3pc on the back of the escalating conflict, stoking worries over sustained disruption of energy supplies, threatening the outlook for Asia’s third-largest economy.

Modi told the Lower House of Parliament that India has sufficient petroleum availability, with strategic reserves currently exceeding 5.3 million metric tons, and work underway to create reserves of another 6.5 million metric tons, Modi told the lower house.

“The inherent strength of India’s economic fundamentals has … provided significant support to the nation during this period,” he said.

Adequate arrangements have also been made for fertilisers supply for the summer sowing season that starts in June-July, and for coal to meet the rising demand for electricity as temperatures rise, he........

© Dawn Business