ING expects foreign inflows to exceed USD 50bn by September, bolstering INR amid oil price pressures and geopolitical risks.
The Indian Rupee (INR) has retreated from June highs due to rising US-Iran tensions and higher oil prices, eroding investor sentiment. However, measures like FCNR deposits and potential global bond index inclusion are expected to drive inflows above USD 50bn by September.
Earlier inflows had softened, but ING economists anticipate a turnaround, converting a projected balance-of-payments deficit into a surplus. A shift from AI-driven equities to Indian markets could further boost foreign investment, despite muted recent interest.
These factors are seen providing a tailwind for the INR, countering external pressures.