The war between Iran and Israel is taking a new turn every day. On Tuesday, Iran took it one level further by attacking Israel with missiles. In such a situation, now the possibility of this fire being limited only to Israel, Iran and Lebanon has reduced, rather its impact will be seen in the entire Western Asia (Middle East) and India can also get burnt in this fire. Its impact will be seen on everything from stock market to inflation in the country.
The biggest impact of the Iran-Israel war can be seen on inflation in India. The reason for this is that India imports more than 80 percent of its petroleum needs. In India, petrol and diesel have a direct connection with inflation, because we still depend to a large extent on road transport for freight transportation. In such a situation, if the prices of petroleum increase due to the Iran-Israel war, then the prices of vegetables, milk and all other essential commodities in India are sure to increase.
The effect of Iran's attack on Israel on Tuesday was also seen on the prices of crude oil. A jump of 4 percent has been seen in their prices. The rate of Brent future has increased by 3.5 percent to reach $ 74.2 per barrel. Whereas America West Texas Intermediate Crude Oil has reached $ 70.7 per barrel with an increase of $ 2.54 or 3.7 percent.
After this new development of Iran-Israel war, now it also has to be seen whether the decision to cut the repo rate will be taken in the meeting of the Monetary Policy Committee of the Reserve Bank of India (RBI) to be held next week. RBI is facing not just one but many challenges at this time.
Firstly, America's Federal Reserve reduced the interest rates last month, secondly China's bailout package of 142 billion dollars for its economy and now the increase in crude oil prices due to Iran-Israel war and the fear of increase in inflation due to it, in such a situation. RBI will have to take a decision to prevent the inflation which was brought under control with great difficulty, from going out of control again.
But the problem will not end here because RBI will have to strike a balance to increase the demand side in the country in the coming festive season. Currently, the demand situation in the country is such that car dealers worth more than Rs 70,000 crore are lying in inventory. Car companies have offered huge discount offers on cars.
