When it comes to future Pound demand, Sterling may flop against the Rupee if it looks like UK businesses are suffering as Brexit negotiations progress.
Notably, a recent survey by Deloitte has shown that only 19% of top UK financial officers believe UK business will be improved by Brexit.
On the other end of these predictions, 60% have forecast worse conditions once the UK leaves the EU. It is worth noting that these stats are an improvement on previous surveys, but still show that optimism about Brexit is low.
Commenting on the situation has been Deloitte Senior Partner and Chief Executive David Sproul;
‘The UK’s exit from the EU is a long and uncertain process and business sentiment is changeable. This [latest] survey [shows] that the UK corporate sector enters the negotiation phase of Brexit in far better spirits than seemed likely in the months after 2016’s referendum vote. For many businesses, access to skills is one of the most pressing issues. I believe mobility of people should be as high a priority as trade in the future negotiations’.
If early Brexit talks show negotiators stumbling over the issue of free movement, then the Pound may depreciate against the Rupee on the implication that UK business really will be worse off post-Brexit.
For future Indian Rupee movement, it bears watching national growth and seeing how closely it matches up to Finance Minister Arun Jaitley’s forecasts.
Offering a long-term outlook, Jaitley has estimated Indian growth will hit 7.2% in 2017 and 7.7% in 2018, but also stated that $646bn is needed for infrastructure development over the next 5 years.
While the Finance Minister’s estimates for Indian growth over the coming years represent a long-term outlook, the Rupee could still be moved more immediately if Indian data shows falling growth instead of a rise.
In 2017, signs of steadily increasing national growth are likely to inspire gradual Rupee appreciation.
The other part of Jaitley’s statement about infrastructure requirements may also run into trouble if it seems unfeasible. While India is an extremely large and populous nation on the world scale, such an astronomical figure will still not be considered lightly.
Recent Interbank GBP INR Exchange Rates
At the time of writing, the Pound to Rupee (GBP INR) exchange rate was trading at 81.33 and the Rupee to Pound (INR GBP) exchange rate was trading at 0.01.