We which have mostly talked about. Oil has

We have always noticed that foreign exchange rate keeps changing every day and very few among us would know that what the real factors that cause this change are. The fluctuations in oil price are one of the factors by which foreign exchange rate gets affected. And there are a lot of issues which India has been facing during the last decade and among that there are a few recent developments which have mostly talked about. Oil has always been one of the most dynamic and influential commodities. Recently it has become increasingly important to study the oil – macroeconomic dynamics in the context of developing nations, especially India due to the following points.
India is one of the countries that are being projected for fastest growth in fuel consumption corresponding to their growth in GDP given the drastic policy change in India with the deregulation of oil pricing, it is critical to understand the impact of oil price shocks on economic and investment activities in the country
Oil constitutes more than one third of the total imports value in India, which is struggling with high current account deficit(CAD)A Value at risk analysis was reported to suggest that with every $10 increase in oil prices, CAD would rise by 0.4 percentage points.


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