Will oil be lucky for the RBI?

The decision by the Reserve Bank of India (RBI) to not raise rates on October 5 took the market completely off-guard. The market consensus (including mine) was a rate hike by the RBI in consonance with a weakening rupee and the threat of Brent touching the magical three-figure mark. The rupee recovered strongly on Friday, with oil, the US treasury rates all retreating from their highs. In hindsight, it seems the RBI decision to hold rates against the overwhelming market consensus was justified. It also seems crude oil prices will prove lucky for the RBI. Here’s how.

Consider this. During