The GBP to INR exchange rate has recently been influenced by a combination of weak economic performance in the UK and significant pressures on the Indian rupee. Most notably, analysts noted that the pound (GBP) retreated after disappointing UK GDP figures revealed a 0.1% contraction in October, which raised concerns about potential stagflation and increased likelihood of an interest rate cut by the Bank of England (BoE).
As the week began, the GBP was expected to remain subdued, with high-impact UK economic releases on the horizon. Analysts observed that fund managers in the UK are increasingly raising foreign exchange hedging due to volatility in the currency, which suggests a cautious outlook among investors. Furthermore, while the pound showed strength against the US dollar, it weakened against the Euro as market participants anticipated an interest rate cut by the BoE amidst divergent monetary policies compared to the European Central Bank.
On the other side, the Indian rupee (INR) is facing substantial challenges, reaching a record low of 90.42 per USD. This has been attributed to a widening trade deficit and substantial foreign investment outflows, amounting to nearly $17 billion this year. The Reserve Bank of India (RBI) has indicated a willingness to tolerate a weaker rupee in light of these pressures, further complicating the currency's outlook.
The current exchange rate for GBP to INR stands at 120.9, which is 2.2% above its three-month average of 118.3. This reflects stability within a 5.7% trading range between 115.5 and 122.1. Forecasters suggest that unless significant shifts occur—such as improvements in economic conditions in the UK or interventions by the RBI to stabilize the rupee—investors should prepare for continued fluctuations in the GBP/INR rate.
Overall, with the UK poised for potential policy adjustments and the INR under pressure from persistent economic challenges, the outlook for the GBP to INR exchange rate remains complex and requires close monitoring.
