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Rupee gives back June gains as US-Iran tensions lift oil costs
ING economists expect foreign inflows to support the INR, pointing to FCNR deposit measures and projected inflows above USD 50 billion by September.
ING economists Deepali Bhargava and Lynn Song said the Indian rupee has given back much of its June gains as US-Iran tensions weigh on sentiment, with rising oil prices adding pressure.
The note highlighted that, despite the pullback, ING remains constructive on the INR, citing measures tied to FCNR deposits and expecting foreign inflows to exceed USD 50 billion by September.
ING also pointed to potential developments such as global bond index inclusion, along with rotation away from AI-driven equities, as factors that could help revive foreign flows into India.
FXStreet’s wrap added that markets are staying cautious on broader risk, with conflicting signals from US and Iranian officials keeping traders wary ahead of Friday’s US jobs report, while safe-haven demand for the US dollar persists.