The Pound moved higher against the Indian Rupee on Thursday after the Indian currency’s recent gains were erased by speculation that the nation’s Central Bank intervened in the market.
The Rupee softened as speculation grew that Indian Central Bank intervened in the currency market to rein in a run of gains which has seen the Rupee become the best performing Asian currency of the year so far.
So far this year the Rupee has advanced by 4.2% this year.
According to Admisi Forex India Pvt. the Indian Reserve Bank increased its purchase of US Dollars. The Bank’s reserve of foreign exchange climbed above $300 billion in 2014 for the first time in three years as India’s new government prepares to deliver its first budget next month.
The Bank’s intervention to stem the Rupees recent run of gains was designs to keep the nations exporters competitive.
“The RBI is protecting the Rupee from sharp gains to maintain India’s export competitiveness. Investors now await the new government’s budget and policy announcements for cues,” said Suresh Nair from the Mumbai based Admisi Forex.
The Rupee has been performing strongly since Prime Minister Modi’s Bharatiya Janta Party secured India’s first single party majority since the 1980’s in last month’s national elections.
Investors favoured Modi due to his promises to reform the nation’s economy and tackle corruption which has proved detrimental to India’s economic growth.
The Pound meanwhile found support from a report which showed that UK house prices advanced by 3.9%. Property prices are now at a six year high as demand continues to outstrip supply.
The main event of the session however is today’s Bank of England and European Central Bank policy meetings.
All eyes are now focused on the ECB to see what monetary easing measures will be introduced by policy makers.
Indian Rupee Exchange Rate
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,Indian Rupee,80.6937 ,
Pound Sterling,,Indian Rupee,99.3463 ,
US Dollar,,Indian Rupee,59.2850 ,
Australian Dollar,,Indian Rupee,55.0178 ,
[/table]
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