The Pound to Indian Rupee exchange rate reached its highest levels since the Sterling flash crash today as GBP advanced on a double whammy of positive news.
Pound (GBP) Exchange Rates Bolstered by High Court ‘Brexit’ Decision
The Pound Indian Rupee (GBP INR) exchange rate surged earlier today as the British High Court ruled that the UK government would not be able to invoke Article 50 of the Lisbon Treaty and begin ‘Brexit’ without the support of parliament. Neil Wilson of ETX Capital explains;
‘The High Court ruling on Article 50 is a body blow for Theresa May and the Brexit-leaning ministers at the heart of government. It’s made triggering Brexit a lot trickier and has given Sterling a massive shot in the arm.’
Markets reacted positively to the news as it is perceived as hindering the government’s plans to pursue a ‘hard Brexit’, which would cause the UK to lose access to the single market in order for Britain to gain stronger controls on immigration.
Indian Rupee (INR) Slides as BoE Freezes Interest Rates
Sterling made further gains in the afternoon as the Bank of England announced that it would not be lowering interest rates at this time. The bank stated that the UK economy has performed better than expected since BoE Governor Mark Carney made the decision to lower rates to their current record lows immediately after the UK’s vote for ‘Brexit’.
Markets also reacted positively to the announcement that the Bank would not be seeking to raise its quantitative easing past £435billion. However the Bank did not rule out additional monetary easing should ‘Brexit’ put too much pressure on the economy.
GBP INR Exchange Rate Long-term Forecast: Pound likely to Slide as 2017 Approaches
The GBP INR exchange rate may drop in the run up to 2017 as ‘Brexit’ once again causes market sentiment to decline. One reason for this is that the UK government will likely challenge the High Court ruling on its ability to trigger Article 50 in the Supreme Court by the end of the year.
Today’s warning on the rate of inflation from the BoE may also cause some concern for investors as the bank forecasts that UK CPI will surge to 2.7% in 2017, outpacing wage growth and possibly causing spending to drop.
Current Interbank Exchange Rates
At the time of writing the GBP/INR exchange rate was trending around 82.02 and the INR/GBP exchange rate was trending around 0.01.
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