NatWest: Positive Fundamentals Warrant A Bullish Outlook

NatWest reiterate their “fundamental bullishness on Indian assets and stability for INR,” flagging the following broad areas of support:

• “Policy focus on infrastructure and manufacturing to drive economic growth.”
• “A potential BJP election win this year is likely to be a market-positive event.”
• “Portfolio flows are likely to stay strong on growth outlook and bond index inclusion.”
• “Current account deficit likely to shrink further and be a strong anchor for INR.’”
• “RBI FX interventions will continue to keep the INR stable.”
• As such they recommend going long INR vs IDR, given “bullish fundamentals for INR and political risk rising in Indonesia ahead of elections.”