The Indian Rupee (INR) to British Pound (GBP) exchange rate is showing signs of instability due to a confluence of economic pressures impacting both currencies. Analysts have observed that the INR is currently trading at 0.008568, which is 1.3% above its three-month average of 0.008461, indicating a degree of resilience amid a turbulent market. However, the currency has experienced a stable trading range of 4.0% from 0.008325 to 0.008656 in recent weeks.
Recent developments in the UK have added downward pressure on the GBP. The UK economy grew just 0.1% in the third quarter, prompting speculation that the Bank of England (BoE) may lower interest rates in December. This situation has raised concerns among investors about the upcoming UK budget and potential fiscal shortfalls. According to reports, fears of tax hikes and interest rate cuts have turned investor sentiment negative, leading to the pound trading at multi-month lows against major currencies. The decline can be attributed to growing expectations that the BoE will take more accommodative measures soon, further diminishing the currency's appeal.
On the other side, the INR has been struggling as well. A historic low against the US dollar exacerbated by increased US H-1B visa fees and reduced foreign equity inflows has weighed on the rupee. The Reserve Bank of India (RBI) has taken active measures, expanding its short dollar forward positions to stabilize the currency. However, persistent demand for dollars from importers and a weakening outlook for India's manufacturing exports complicate recovery efforts. Recent trends indicate that the narrowing policy rate differential with the US is likely to continue exerting pressure on the INR.
In summary, currency analysts suggest the INR is vulnerable due to external pressures, while the GBP faces its own set of challenges linked to economic growth and fiscal uncertainty. These factors will likely create a fluctuating exchange rate environment in the near term, and stakeholders in international transactions should remain vigilant for further developments impacting both currencies.
