GBP/INR forecasts change all the time, affected by news events and relative sentiment towards the UK and Indian economies and this exchange rate is even more volatile than usual because of the uncertainties around the Coranavirus pandemic.
At the end of the January the GBP/INR exchange rate was heading towards the 100 mark down from its highs around 104 in April last year.
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Unlike Latin American countries, which continue to benefit from a U.S. recovery, Asian countries are vulnerable to economic austerity in Saudi Arabia and elsewhere in the Middle East due to the drop in demand for Oil during the Covid pandemic. More than 60% of remittances to India, Bangladesh and Pakistan come from Gulf countries.
The foreign exchange market convention for GBP/INR is to quote Indian Rupee as Rupee per US dollar. Thus a higher GBP/INR rate actually means one rupee is worth less, that is you can buy more rupee for 1 GBP.
Most Asian currencies weakened in 2021 (including the rupee) against the dollar on fears that surging energy prices could spur inflation and interest rate hikes.
India imports most of its oil requirements and higher crude prices tend to push up domestic inflation.
The pound has been resilient enough to withstand Prime Minister Boris Johnson’s troubles. However, if he implements any new taxes for consumers in a nation that is already in a tough economic situation then it will likely have a significant effect on the currency.
But despite this, the British pound has had a good start to the year—its best start to a year since 2018.
Disclaimer: Please note any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.