Ahead of a major speech on Brexit by the UK Prime Minister, the Pound has made a minor loss against the Indian Rupee.
Indian news has mainly been focused on forecasts for economic growth, which could weaken the Rupee in the future.
Pound Sterling Predicted to Tumble if PM’s Speech Angers EU Officials
The Pound may turn volatile against the Rupee in the near-term, when Prime Minister Theresa May delivers a much-awaited speech.
The PM will be speaking about Brexit in the city of Florence and may outline her plans for the UK’s path out of the EU.
Problematically, however, some suspect that the PM’s message may be watered down to appeal to hard-line Brexiteers in her own party.
Broadly speaking, the PM is expected to deliver a conciliatory speech that aims to get the Brexit process back on track. Negotiations have stalled recently, owing to differences of opinion over what should take priority.
According to some commentators, EU Chief Brexit Negotiator Michel Barnier is due to speak immediately after Theresa May says her piece.
This could provide an immediate snapshot of the EU attitude to the UK – if Barnier accepts May’s suggestions then the Pound could rally.
Conversely, if EU leaders criticise the PM for a lack of clarity in her speech riddled with vagaries then Sterling could drop sharply, given that this would represent a recurrent problem for the UK in the Brexit process.
Indian Rupee Outlook: Losses Possible on Slowing National Growth
Looking ahead, the Indian Rupee could face difficulties in the future if national economic growth declines.
These concerns have come after the Organisation for Economic Cooperation and Development (OECD) estimated that national growth may slow to 6.7% in over 2017-2018.
This revised estimate has been lower than the prior 7.3% prediction, which was made in June. Showing its workings, OECD officials said;
‘The transitory effects of demonetisation and of the implementation of the Goods and Services Tax (GST) have led to a downward revision in 2017 growth projections, while business investment has remained weak’.
While there have been teething problems with the implementation of the new GST policy, OECD analysts still think it could boost national productivity, economic growth and business investment in the coming years.
If upcoming Indian GDP data does indicate a slowdown then the Rupee could decline, even if this dip may just be a temporary stumble on an otherwise strong economic path.
Recent Interbank GBP INR Exchange Rates
At the time of writing, the Pound to Indian Rupee (GBP INR) exchange rate was trading at 87.8246 and the Indian Rupee to Pound (INR GBP) exchange rate was trading at 0.0113.
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