Pound to Indian Rupee (GBP/INR) Exchange Rate advances today after Indian budget announced

Before India’s interim budget was presented by Finance Minister Palaniappan Chidambaram the Rupee was trading lower against several of its major currency rivals.

The emerging-market asset edged lower against the US Dollar and dipped against a bullish Pound as industry experts speculated on what economic assessment the Indian government would offer.

In the opinion of forex trader Ashtosh Raina; ‘Investors will use this forecast, and the government’s borrowing projection, to assess the health of the economy. No big-bang reforms are expected as this isn’t the full-fledged budget, so in the absence of anything negative the Rupee is likely to stay around current levels.’

The Rupee’s bearish relationship with the Pound was largely the result of the British asset being supported by last week’s upbeat Bank of England inflation report. However, Sterling gains were extended this morning as a UK house price report showed a 3.3 per cent increase in property values in February.

In the budget India’s government promised to bring the nation’s deficit to its lowest level in seven years, narrowing it to 4.1 per cent of GDP by March of next year.

The government also intends to raise defence spending while cutting taxes on everyday household items like television sets.
While addressing lawmakers in New Delhi, Chidambaram referenced the Rupee’s more even exchange rate and asserted; ‘I can confidently assert that the economy is more stable today than what it was two years ago. Analysts and rating agencies had acknowledged out efforts some months ago and no longer speak about a downgrade.’

Chidambaram also noted; ‘In a developing economy we must accept that when our aim is high growth, there will be a moderate level of inflation. The challenges that we face are common to all emerging economies. Only a handful of countries were able to keep their head above the water, and among them was India.’

The Rupee edged lower against the US Dollar after the budget was announced and consolidated losses against the Pound.
As the week progresses Indian reports to be aware of include the nation’s money supply, foreign reserves, deposit growth and bank loan growth figures.

GBP/INR fluctuations could also be triggered by UK news, including tomorrow’s inflation report, Wednesday’s employment figures and Friday’s retail sales data.