Foreign portfolio investors (FPIs) have shifted from debt to equities in July, investing $2.59 billion in the first 10 days. This marks a significant sentiment change from earlier in the year, driven by a steady rupee and a shift from semiconductor investments.
The Reserve Bank of India's bi-annual report states an interim US-Iran peace deal could boost India's economic growth by normalizing supply chains. Despite strong macroeconomic fundamentals, the RBI warns of inflation risks from high oil prices and monsoon, and identifies AI cyber threats as a major financial risk.
Housing sales in India's top nine cities rose 19% year-on-year to 112,458 units in April-June, despite global economic uncertainties. New residential supply increased 43% to 117,609 units. Bengaluru led growth, while Delhi-NCR and Kolkata saw declines.
Indonesia's envoy Purbaya visited Beijing to boost investor confidence ahead of a panda bond sale. Chinese companies expressed concerns over stringent regulations, over-enforcement, and corruption, while also worrying about Indonesia's fiscal situation. Purbaya assured them of sound economic fundamentals.
South Korea's Second Vice Finance Minister Huh Chang stated that recent volatility in the won is excessive given the country's strong economic fundamentals. He noted the government is monitoring the market and ready to act against speculative trading.
For RBI the situation is clear: The resilience of the global economy, already inflicted with trade tensions, is being tested by the conflict in West Asia. The biggest takeaway from the RBI bulletin is that India’s domestic supply chains may come under risk from a prolonged war scenario, though strong macroeconomic fundamentals provide a buffer.
