The GBP to INR exchange rate shows a range-bound bias, currently at 121.2, which is 2.2% higher than its three-month average of 118.6.
Key drivers include the interest rate policies of the Bank of England (BoE), which indicate potential cuts could be slower than previously expected, while the Reserve Bank of India faces pressures from global market conditions and trade negotiations. Recent stronger retail sales in the UK may support the pound, but concerns about the UK’s slower growth and fiscal challenges could weigh on it.
The exchange rate is expected to trade within a stable range of recent highs and lows. Upside risk factors include a faster-than-expected recovery in UK economic performance, while the downside risk is a further depreciation of the Indian rupee, potentially driven by inflation and trade issues.
Overall, the currency outlook reflects a balance of competing forces, which could lead to modest fluctuations in the GBP to INR rate.