SGX INR/USD JUN7 (IU2706)
- 102.14
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SGX INR/USD JUN7 (IU2706) News
Reserve Bank of India: India's investment promotion initiatives have attracted over USD 40 billion in foreign investment.
India has been actively attracting foreign capital, drawing in over USD 40 billion since June to bolster the Reserve Bank of India's foreign exchange reserves. With international crude oil prices rising, Indian policymakers are leveraging this inflow to stabilize the rupee. Data released by the Reserve Bank of India on Saturday showed that non-resident foreign currency deposits had reached USD 367.2 billion as of July 31. Combined with overseas foreign currency borrowings and external commercial borrowings, total inflows amounted to approximately USD 41 billion. On July 24, the central bank sold about USD 7 billion to support the rupee, marking one of its largest direct interventions in recent months. At the time, tensions in the Middle East remained elevated, and international crude
Global stock markets are tumbling, yet India stands apart—its lack of AI exposure has paradoxically become an advantage.
Over the past month, India's Nifty 50 Index rose by approximately 1% against the broader market trend, while the MSCI Emerging Markets Index declined by more than 9%. As global AI-related trades cooled, India’s relatively low exposure to AI became an advantage, attracting capital inflows. Additionally, falling oil prices, a stabilizing rupee, and improving earnings expectations provided further support. However, high valuations remain a key constraint, with over 30% of index constituents trading at price-to-earnings multiples above 50x, making it difficult to fundamentally reverse the prevailing trend of capital outflows.
OCBC Bank: The near-term upside potential for Asian currencies is likely to be constrained by the Federal Reserve's hawkish stance.
Gelonghui, June 18 | Strategists at OCBC Bank’s Group Research Department stated that, against the backdrop of the Federal Reserve maintaining a hawkish stance, Asian currencies may face limited upside potential against the U.S. dollar in the near term—particularly low-yielding currencies and those more sensitive to U.S. Treasury movements, including the Thai baht, Korean won, and to some extent, the Singapore dollar. However, they added that falling oil prices remain a significant offsetting factor, easing current account and inflationary pressures on currencies of oil-importing countries such as the Indian rupee, Philippine peso, and Indonesian rupiah.
India plans to abolish capital gains tax on foreign-held government bonds to stabilize the local currency exchange rate.
According to informed sources, the Indian government plans to eliminate the capital gains tax on investments in Indian government bonds by foreign portfolio investors (FPIs), aiming to further attract overseas capital inflows and alleviate depreciation pressure on the domestic currency. Affected by elevated international crude oil prices and global equity market capital outflows, the Indian rupee has depreciated by more than 5% against the U.S. dollar so far this year. To address the persistent downward pressure on the rupee, the Indian government is actively implementing measures to draw foreign investment into the bond market. Currently, foreign investors are subject to a 12.5% long-term capital gains tax on investments in listed Indian equities and bonds held for over one year. The aforementioned sources indicated
Express News | Indonesia and India Intervene to Support Weakening Currencies
On Friday, Indonesia and India took intervention measures to support their domestic currencies, which are under downward pressure due to surging energy prices. Despite authorities selling foreign exchange reserves, the Indonesian rupiah fell 0.5% against the U.S. dollar. The Indian rupee rose 0.7% on Friday, ending a two-day losing streak. Year-to-date, the rupiah has depreciated by 7% against the dollar—the steepest decline among emerging market currencies—while the rupee has declined by 5.7%. In a statement released Friday, Bank Indonesia said it remains committed to ensuring round-the-clock, globally consistent exchange rate stability for the rupiah through interventions in the spot foreign exchange market, non-deliverable forward (NDF) operations, and purchases of government bonds. Meanwhile, according to informed traders, the Reserve Bank of India sold U.S. dollars in both offshore and onshore markets to support the rupee. The central bank has been intervening in the market over the past several days to bolster the currency.
Express News | Iran War Triggers Extremely Bearish Scenarios for Asian Currencies and Bonds
On May 21, the Iran war is exerting pressure on emerging Asian markets, pushing some currencies and bond yields to levels once considered unlikely. As the conflict persists, some analysts are sketching out even more extreme bearish scenarios, including the Indian rupee depreciating to 100 against the U.S. dollar, the Indonesian rupiah falling to 18,000, and the Philippine peso weakening to 65, as elevated energy prices stoke inflation and hurt import-dependent economies. Bond markets are also feeling the strain. India’s benchmark yield could test the highs seen in 2022, while the head of the Philippine Association of Mutual Funds indicated yields might climb to an 8% multi-year high. (Jinshi)
Is the 1997 Asian financial crisis haunting markets again? A 'perfect storm' fueled by U.S. Treasury yields surpassing 5% and surging oil prices sends the Indian rupee, Indonesian rupiah, and Philippine peso to historic lows.
A global bond sell-off could trigger turmoil in Asia's weakest economies.
Express News | Emerging asset prices fell as US-Iran talks yielded no results.
Risk sentiment was dampened by escalating tensions following the breakdown of peace negotiations in the Middle East, leading to a decline in emerging asset prices. The MSCI Emerging Markets Index fell by 1.2% during Asian trading hours, weighed down by technology stocks including Samsung Electronics Co. Most currencies in the region depreciated against the US dollar, with declines of over 0.7% for both the Indian rupee and the South African rand. The Hungarian forint performed relatively well after pro-EU opposition parties achieved an overwhelming victory in Hungary’s parliamentary elections. Abbas Keshavani, a macro strategist at Royal Bank of Canada based in Singapore, stated: 'This weakness has not completely dissipated, and for many energy-importing countries, this will be a slow process of 'capital outflows.' As long as energy prices remain high, importers in regions such as India and South Korea will need to pay more US dollars than usual—essentially reflecting a gradual and sustained demand for the US dollar.'
Indian Central Bank Holds Rates as Mideast War Keeps Outlook in Flux
India's central bank kept its policy rate steady in a widely expected decision as policymakers around the world gauge how to react to the rapidly evolving war in the Middle East.
The Reserve Bank of India Faces Challenges from a Weak Rupee; the Market Widely Expects the Bank to Keep Interest Rates Unchanged This Week
According to the news from Gelonghui on April 7th, the Reserve Bank of India may keep interest rates unchanged on Wednesday, marking its first policy decision since the Iran war. The bank is striving to address the significant depreciation of the rupee while attempting to support economic growth. All 30 economists surveyed by Bloomberg expect the Reserve Bank of India to maintain the benchmark repo rate at 5.25%, even though the economic outlook has dimmed since the last meeting, during which the bank had already signaled a prolonged period of inaction. The Middle East crisis has placed the Monetary Policy Committee in a dilemma. The sharp decline of the rupee since the outbreak of the conflict has become a critical pressure point, prompting the Reserve Bank of India to take action.
Driven by the conflict in the Middle East, foreign capital sold off Indian equities worth over USD 12 billion this month, setting a new historical record.
Foreign investors are expected to withdraw a record $12 billion from Indian equities in March, as disruptions to oil and gas supplies caused by the conflict in Iran have pressured the Indian economy and heightened concerns about slowing growth. With only two trading days left in the month, foreign investors have already pulled out 1.12 trillion rupees ($12.1 billion) from Indian stocks. According to data from depository NSDL, this is likely to mark the largest-ever monthly sell-off, surpassing the previous record of 940 billion rupees set in October 2024. "The significant withdrawal by foreign institutional investors in March 2026
Goldman Sachs has downgraded India's economic growth forecast, warning that monetary tightening will force interest rate hikes.
Goldman Sachs has scaled back its forecast for India's economic growth in 2026 while predicting a 50-basis-point increase in policy rates as the South Asian economy grapples with significant currency depreciation. In a report on Tuesday, Goldman Sachs projected that India’s economy would grow by 5.9% in the 2026 calendar year, down from a previous forecast of 7% made before the Iran conflict. The Wall Street bank had already lowered its South Asia growth forecast to 6.5% on March 13. Goldman Sachs analysts further reduced their growth expectations after revising assumptions regarding oil prices and the duration of supply disruptions.
Indian Rupee Hits New Lows, Central Bank Intervenes Again
On March 20, according to the Grayscale Investment Union, the Indian rupee fell against the US dollar, breaking through 93 and hitting a record low due to concerns that prolonged conflicts in the Middle East might lead to an expanded current account deficit. The Reserve Bank of India has been intervening to support the rupee, with traders reporting another round of intervention by the central bank on Friday. Brent crude oil is currently priced at approximately $106 per barrel, far exceeding the baseline level of $70 per barrel estimated by the Reserve Bank of India in October last year. According to data from the Reserve Bank of India, a 10% increase in global crude oil prices would result in a 0.15% decline in economic growth and a 0.3% rise in inflation.
Express News | Survey: Middle East War Triggers Oil Price Hikes, Investors Shun Asian Currencies
A survey released by Reuters on Thursday showed that due to the escalating Middle East war disrupting energy markets and raising concerns over inflation, current account pressures, and policy constraints in the region, short positions in Asian currencies have slightly increased. According to a survey of 11 respondents, investors turned bearish on the Thai baht for the first time since early April 2025, while short positions in the South Korean won and the New Taiwan dollar also climbed to multi-month highs. This shift in positioning reflects the severe energy crisis triggered by the Middle East conflict. The Chief Asia Macro Strategist at Japan’s Sumitomo Mitsui Banking Corporation stated, "This conflict is likely to persist for several weeks... Brent crude prices will remain elevated in the short term." He pointed out that under these circumstances, currencies such as the won, rupee, and peso would be "more vulnerable," while the renminbi, Singapore dollar, and ringgit may demonstrate greater resilience.
Express News | India's Sensex index may record its largest single-day decline in a year.
Due to a renewed rise in market risk aversion, India's Sensex index is expected to post its largest single-day drop since April 2025. Devash Vakil of HDFC Securities stated that escalating tensions in the Middle East, surging Brent crude oil prices, and the Federal Reserve’s hawkish stance are weighing on Indian equities. The conflict in Iran is particularly unsettling for the Indian market, as the country is a major energy importer with limited strategic reserves, making it highly vulnerable to fluctuations in energy prices. The rupee has fallen to a record low against the US dollar amid significant selling pressure triggered by strong demand from importers. Shares of Indian banks and energy companies have declined broadly. The Sensex index is currently down more than 2%.
Express News | India's foreign exchange reserves drop to a three-year low as analysts urge the central bank to reduce forex interventions.
The Reserve Bank of India's recent measures to protect the rupee's exchange rate are putting pressure on the country's foreign exchange reserves, prompting some analysts to suggest reducing future interventions. India’s forex reserves (excluding gold) currently cover only 8.7 months of import needs, the lowest level in three years. This comes at a time when rising energy prices have caused India’s import bills to climb, affecting both its economy and markets. Indranil Pan, Chief Economist at Yes Bank, stated that the more the RBI intervenes, the less firepower it retains, which could lead to further complications if the ongoing crisis in the Middle East escalates. For external sectors, the shock absorber can only be the exchange rate itself. The RBI indeed needs to show greater flexibility in allowing the rupee to depreciate. Dhiraj Nim, a forex strategist at ANZ Bank, noted that if fundamentals have shifted permanently, maintaining the rupee at a specific level might soon become very challenging. Before the level of forex reserves becomes an issue, the RBI could allow further adjustments to the rupee.
India's Economy Grows 7.8% in Fiscal Q3 Under New GDP Series
India's real GDP grew 7.8% year over year in the fiscal third quarter ended Dec. 31, 2025, according to new GDP estimates under the revised national accounts series.