The Pound has been able to advance steadily against the Indian Rupee today, having been previously bolstered by retail sales results.
The Rupee’s present weakness is largely due to ongoing turmoil at the nation’s banks, which have been confronted with high demand in the wake of a radical Government scheme.
Pound Rupee Exchange Rate Holds Gains after Retail Sales Surprise
The Pound Indian Rupee exchange rate has advanced to 89.64 during trading today.
With no major UK data out today, this advance is largely due to yesterday morning’s October retail sales figures, which rose above forecasts in all fields.
On the Rupee’s side, the INR has been softened lately by the continuing turbulence seen across the country in the wake of the November 8th demonetisation of two denominations of Indian Rupee bank notes.
This was effected to battle tax avoidance by forcing cash holders to deposit their funds at banks, but has had the side-effect of throwing the economy into disarray.
This is mainly on account of the sheer population density of India, as well as the fact that the now-illegal 500 and 1000 value Rupee notes are used in over 80% of cash transactions, which represent around 90% of all Indian monetary exchanges.
GBP INR Exchange Rate Expected to Rise if Government Loses Article 50 Appeal
The next significant news for the UK spans both the end of 2016 and the start of 2017, concerning the Government’s efforts to overturn a court loss that prevents it from triggering Article 50 without parliamentary deliberation.
The appeal itself is expected to be made to the Supreme Court at the start of December, but the decision of the eleven presiding Judges isn’t due to come until January 2017 at the earliest.
Should the Government reverse the situation and win its appeal, the Pound is expected to crumble against the Rupee, as it will put a late March triggering back on track. This renewed timeline will likely rattle investors, given that it will put a provisional two-year cap on the UK’s EU membership, after which the future will be a great unknown.
Indian Rupee Outlook: Success in Currency Switching Scheme Expected to Boost INR Value
With disruption since the surprise demonetisation still widespread across India, the future performance of the Rupee seems intrinsically tied to how long this state of economic unrest continues.
While the news has highlighted how reliant India is on cash transactions, it remains to be seen whether this plan to crack down on tax avoidance will cause anything more than discontent and lost revenue for Indian businesses.
In the extreme long-term, if the radical scheme is proven to have been ultimately successful, with the Government claiming back millions or even billions in undeclared cash, the Rupee may well appreciate.
Recent Interbank Exchange Rates
At the time of writing, the Pound Rupee (GBP INR) exchange rate was trending in the region of 84.71 and the Rupee Pound (INR GBP) exchange rate was trending in the region of 0.01.
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