Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate – Rupee falls on BOE report

The Indian Rupee fell against the Pound after the Bank of England’s quarterly inflation report and softened against other major peers following the release of inflation and production data.

The Rupee tumbled against a broadly stronger Pound after the Bank of England increased its growth forecasts for the UK economy and as Bank Governor Mark Carney adjusted his forward guidance policy. The BoE now believes that the UK economy will expand by 3.4% in 2014.

The Rupee found some support from better than forecast domestic data.

Manufacturing production in the Asian country fell in December by -1.6% on a year on year basis, a smaller decrease than the -3.5% decline seen in the previous month. The figure was also better than economists had forecast for a decline of -2.35%.

Industrial Production meanwhile also fell less than forecast. In December, production in the industrial sector fell by -0.6%, down from the previous month fall of -2.1% and less than the -1% fall expected by economists.

India’s inflation rate also eased in January. The rate dropped to a two-year low of 8.79%, down from the 9.87% recorded in the previous month. The rate eased due to a drop in food prices. The supply of food has increased due to a positive monsoon season which led to a bountiful harvest. Prices of vegetables were 30% lower in December than the previous months. The India Central Bank will be pleased with the data as inflation fell closer to its target of 8%.