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Iran $6.5 Bn Worth Outstanding Bill Due on Oil Refineries may Lead to Liquidity Crunch for India

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Fearing a run on the rupee in the event of having to pay nearly USD 6 billion in past dues to Iran, the government has asked oil refiners to gradually buy dollars/euros and be ready to clear all dues by the year end. 
Source: ET

 
SNP Insights
 
Repaying Outstanding bill worth $6.5 Bn, from govt current account balance will lead to liquidity crunch for the country. It will significantly deplete current account balance of India & weakening of rupee may subsequently follow. So to repay the outstanding bill through foreign nostro account of respective oil refineries is the effective way out. It would be intersting to see, due revokal of western sanction on Iran & Oil refineries subsequent stake to repay the outstanding bill in due course of time.
 
Source:SNP Infra Research