GBP/INR Outlook:
The GBP/INR rate is slightly positive but likely to move sideways, as it currently sits just above its 90-day average. The recent political uncertainty in the UK hampers any strong upward momentum for the Pound.
Key drivers:
• Rate gap: The Bank of England's dovish monetary policy outlook suggests potential interest rate cuts, creating downward pressure on the GBP compared to the INR.
• Risk/commodities: Oil price fluctuations could continue to disrupt India's trade balance, impacting demand for the INR.
• One macro factor: The UK's economic growth is projected to slow significantly, with reduced business investment likely to weigh on the GBP.
Range:
The GBP/INR rate is expected to hold within its recent range, as it drifts in a stable manner rather than testing extremes.
What could change it:
• Upside risk: A decisive improvement in UK political stability could support the GBP.
• Downside risk: Continued uncertainty surrounding the UK's leadership may lead to further GBP depreciation.
