Shantanu Sengupta, Chief India Economist at Goldman Sachs, said any prolonged disruption in the Strait of Hormuz could affect India mainly through higher oil prices. He said the immediate impact would be on the current account deficit, which could widen by 20–30 basis points, while growth risks could increase if the shock persists. Goldman Sachs remains comfortable with its forecast for the rupee to trade around 93–94 against the US dollar over the coming months, though the risks could tilt higher if oil prices remain elevated. Chandresh Jain, Rates and FX Strategist for Emerging Markets Asia at BNP Paribas, also expects the rupee to weaken further if crude stays high, although intervention by the RBI and the country’s foreign exchange reserves could help cushion the pressure. He added that India’s macro position remains stronger than during past external shocks.
