As some expected, the Pound has crashed against the Indian Rupee today, following a joint press conference on Brexit. From an earlier exchange rate of 86.1893, Sterling has since fallen to 85.6183.
During the event, EU chief negotiator Michel Barnier warned that talks had reached a deadlock on the issue of the UK’s ‘divorce bill’ to the EU.
This sparked fresh concerns about the UK missing its Brexit deadline, as well as raising fears that there would be a greater push for a ‘no deal’ exit.
(First published October 12th, 2017)
The Pound has traded tightly against the Indian Rupee today, but may be in for a significant decline in the future.
This will be largely dependent on whether UK and EU officials feel that Brexit negotiations have been progressing.
Pound Sterling Forecast: Will GBP Trade Higher on Brexit Update?
The Pound may be in for turbulence in the near-future, depending on what is said in a joint Brexit press conference.
Brexit Secretary David Davis and chief EU negotiator Michel Barnier will both be speaking in Brussels.
This conference comes at a crucial time in the Brexit process, with the fifth round of talks having just concluded.
Problematically, there have so far been no signs that either side has solved the first three issues of negotiations.
These have been the future of the Irish border, the rights of EU citizens in the UK and whether the UK pays a ‘divorce bill’ to the EU.
The two Brexit leads are due to give an update on talks so far, which comes ahead of an EU-wide summary of talks next week.
If Barnier says that no real progress has been made then the Pound could decline sharply, as this might mean that the UK is forced to rush through talks and agree to an unbalanced deal just to meet its deadlines.
Indian Economic Outlook: Will Tax Reforms Pay Off for Economic Growth?
The Indian Rupee has fluctuated against the Pound recently, but could be on track for consistent gains in the future.
This partly depends on whether International Monetary Fund (IMF) forecasts for lower Indian growth in 2018 prove accurate.
The IMF has recently estimated 7.4% growth in the coming year, down from a prior 7.7% estimate.
The IMF downgrade is partly due to uncertainty about the effects of demonetisation efforts last year, as well as new tax reforms in the country.
In July this year, a nationwide Goods and Services Tax (GST) was launched. This was designed to simplify India’s tax system and reduce the revenue lost by illegal activities.
Looking at the future of the Indian economy has been Finance Minister Arun Jaitley. Jaitley has been praising the ambitious nature of Indian economic reforms, stating;
‘These are institutional reforms. These are structural changes. And [I think] these structural changes have put the Indian economy on a far more sound track so that we can look forward for a much cleaner, much bigger Indian economy in the days and years to come.
Even though the Indian economic reforms started a few decades late, the direction that India faces is probably the direction that [will] help the country considerably. Any suggestion that we go back to more regulation, go back to stricter controls, I think we are in the process of dispelling any notion of that kind’.
In the event that the Indian economy does show consistent growth in the weeks and months ahead, the Rupee could progressively appreciate due to rising trader optimism.
Recent Interbank GBP INR Exchange Rates
At the time of writing, the Pound to Indian Rupee (GBP INR) exchange rate was trading at 86.1893 and the Indian Rupee (INR GBP) exchange rate was trading at 0.0116.
Comments are closed.