The GBP to INR exchange rate has exhibited stability recently, trading near 30-day highs at about 118.9, which is approximately 0.7% above its 3-month average of 118.1. This level has been maintained within a relatively narrow range of 4.0%, fluctuating between 115.5 and 120.1.
Current forecasts for the British pound suggest a muted outlook due to downbeat growth predictions. Analysts from KPMG project that the UK economy will expand by only 1% in 2026, driven by higher unemployment and declining consumer sentiment. As a result, the GBP is under pressure, especially in light of anticipated concerns regarding the UK budget scheduled for November 26. Market sentiment has turned negative, largely due to fears of potential tax increases and interest rate cuts by the Bank of England, which may further diminish the currency's appeal.
Recent data indicate that the GBP has weakened against major currencies, hitting multi-month lows against the US dollar and over two-year lows against the Euro. This decline can be attributed to increasing expectations for interest rate reductions from the Bank of England, which is expected to maintain rates at around 4.00% in its upcoming meeting.
In regards to the Indian rupee, it has faced significant challenges, notably reaching record lows against the US dollar. Factors contributing to this decline include increased H-1B visa fees affecting foreign inflows and persistent hedging by importers. The Reserve Bank of India has intervened by expanding its short dollar forward positions in an attempt to stabilize the rupee. Continuous pressure has emerged as weak manufacturing export growth and a narrowing policy rate differential with the US are likely to persist.
Overall, the combination of a bearish environment for the GBP due to economic forecasts and uncertainty, alongside ongoing struggles for the INR, suggests a cautious approach for those engaged in GBP to INR transactions. Currency forecasters and analysts remain attentive to developments that could shift these trends, particularly upcoming policy decisions from the respective central banks.
