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Daily Digest Market Movers: Indian Rupee remains firm due to inflows of foreign investments

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  • Foreign investors have already invested approximately $10 billion into the securities eligible to join JPMorgan’s index on June 28, according to Business Standard. Meanwhile, Goldman Sachs anticipates at least $30 billion more in inflows in the coming months as India’s weighting on the index steadily rises to 10%.
  • The rise in crude oil prices, driven by expectations of strong summer driving demand, could pressure the Indian Rupee. As the world's third-largest oil consumer after the United States and China, India is significantly impacted by fluctuations in oil prices.
  • Reuters cited Fed Governor Michelle Bowman repeating her view on Tuesday that holding the policy rate steady for some time will likely be enough to bring inflation under control. Meanwhile, Fed Governor Lisa Cook said it would be appropriate to cut interest rates "at some point" given significant progress on inflation and a gradual cooling of the labor market, though she remained vague about the timing of the easing.
  • The S&P Global Ratings retained its growth forecast for India at 6.8% for FY25, citing high interest rates and government spending boosting demand in the non-agricultural sectors.
  • India is expected to become a $4 trillion economy in 2025, surpassing Japan by early next fiscal year to become the world's fourth largest economy, according to Indian Economic Advisory Council to the Prime Minister (EAC-PM) member Sanjeev Sanyal.


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