ABSTRACT
This research explores how Brent Crude Oil prices influence significant Indian
macroeconomic variables such as the exchange rate (₹/USD), Sensex, Nifty 50, and
Consumer Price Index (CPI %), based on monthly data covering the years 2015-2024. The
study seeks to analyze the sensitivity of these variables to changes in global crude oil prices.
Secondary data was obtained from publicly accessible websites like Yahoo Finance,
Investing.com, and the Ministry of Statistics and Programme Implementation (MOSPI).
Analytical techniques like correlation analysis, trend charts, and linear regression were
utilized with Microsoft Excel. The findings indicate that crude oil prices statistically
significantly and positively affect both the exchange rate and stock market indices. A high
positive correlation and large regression coefficients indicate that an increase in crude prices
helps in rupee depreciation and has a positive relationship with increases in Sensex and Nifty
50 values. Yet, the effect of the price of crude oil on CPI-based inflation proves to be small
and statistically insignificant and, therefore, reflects that Indian inflation is more a function of
domestic economic forces rather than external movements in the price of oil. These results
provide greater clarity on the mechanisms by which commodity price shocks in international
markets pass through to domestic financial markets and provide guidance for policymakers
and investors operating in oil-sensitive economies such as India.
Keywords - Crude Oil Prices, Exchange Rate, Sensex, Nifty 50, CPI Inflation, Indian
Economy