The Indian Rupee is trading higher against the Pound and climbed to its best level in 11-months against the US Dollar as the opposition BJP party won a landslide victory.
India’s clearest election victory in 30 years saw investor confidence in the country surge and saw the Rupee rally by 2.1% last week, the best performance seen so far this year by any major currency.
The currency also found support from increased foreign buying of domestic debt and shares in the wake of the election.
The BJP won 282 of the 543 parliamentary seats, more than the 272 needed to form a majority government. The scale of the victory means that the BJP will be able to form the first one party government in India since the 1980’s.
The fact that the BJP will be a majority government means that it will be more likely to introduce economic measures that will aid the Indian economy.
The Pound to Rupee (GBP/INR) exchange rate is currently trading at 98.2902.
“The Rupee rose on the back of victory for the BJP with a majority. Any sharp upside in the currency will be capped due to Dollar demand from oil importers and the Central Bank,” said an analyst from Angel Broking Ltd.
Economists are forecasting that the Rupee could push as high as the 57 per Dollar level by the end of the year whilst others are predicting a rally to 55.
“The election result was clearly better than we expected. The outlook for reforms, potential foreign inflows and growth prospects will be even more positive now,” said the head of currency strategy at Nomura Singapore.
The Pound could regain some ground on Tuesday due to the release of inflation rate, PPI and Retail Price Index data.
Indian Rupee (INR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Indian Rupee,98.2902 ,
US Dollar,,Indian Rupee,58.4400 ,
Euro,,Indian Rupee,80.1837 ,
Australian Dollar,,Indian Rupee,54.6706 ,
[/table]
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