Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Mixed in Quiet Session

February 11, 2015 - Written by Ben Hughes

STORY LINK Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Mixed in Quiet Session

The Pound was experiencing mixed movement against the Indian Rupee in a session lacking market moving economic data releases.

On Monday the Indian Rupee made gains against the Pound after data showed that Growth Domestic Product (GDP) in the Asian nation smashed economist forecasts by surging to 7.5% in the fourth quarter.
As the week progressed, however that data was put into doubt and the Rupee gave up its earlier gains. The data showed that growth in India would strengthen sharply to around 8%, making the nation one of the fastest developing countries on the planet. The surge took many economists by surprise as output figures did not add up to the GDP surge.

The cause for the aberration in the GDP figure was a result of the administration of New Prime Minister Narendra Modi completely changing the way in which records data. As a result, no one is sure what the data means.
Economists are saying that the data should not be used by the Reserve Bank of India as the economy is in reality still experiencing a recovery.

‘The RBI shouldn’t use these numbers mechanically. If you use old models for new data, your judgement will not be accurate. From their experience they figure out how to make the best use of it,’ said a bureaucrat in the Indian Statistics Ministry.
Earlier in the session, the Indian Rupee weakened against the Pound and US Dollar due to expectations that the US Federal Reserve will choose to hike interest rates sooner than expected.

‘At this point, raising rates in June looks like the attractive option for me. Data between now and then may change my mind, but it would have to be surprising data,’ said Federal Reserve Bank of Richmond President Jeffrey Lacker.
A lack of market moving economic data releases offered the market little direction for the GBP/INR exchange rate.

The currency pair is forecast to experience movement from the outcome of an emergency meeting of European Union Finance Ministers. The group is gathering in Brussels to discuss the situation in Greece and could find a resolution that will not lead to the nation going bust and leaving the Eurozone.

The Syriza led Greek government has rejected an extension to its current bailout and announced that it wants to overhaul 30% of the bailouts conditions. Germany however believes that the country should stick to the terms of the bailout so the issue is likely to drag on.

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