Indian Rupee Advances against Pound Sterling as IMF Comments Support

STORY LINK Indian Rupee Advances against Pound Sterling as IMF Comments Support

Indian Rupee Advances against Pound Sterling as IMF Comments Support

The Indian Rupee strengthened against the Pound Sterling and US Dollar as the currency continued to receive support from comments made by the International Monetary Fund (IMF), which said that India’s economic growth is likely to outpace China’s in 2016. According to the IMF, the nation’s economic growth will be better than previously assumed and will see India become the world’s fastest growing major economy in 2015 and 2016. A separate report by the World Bank also said the same.

According to both groups, India’s economy will grow by 7.5% in 2015 from the 7.2% seen in the preceding year. For 2016, the IMF is forecasting that the Indian economy will expand by 7.5%, the World Bank meanwhile is expecting growth of 7.9%.

The IMF is predicting that China’s economy will grow by 6.8% in 2015 and by 6.3% in 2016.

‘India’s growth is expected to strengthen from 7.2% last year to 7.5% this year and next. Growth will benefit from recent policy reforms, a consequent pickup in investment, and lower oil prices. The strong growth in India has already made South Asia the fastest growing region in the world,’ said the World Bank.

India is becoming increasingly ambitious and intends to become a major global player over the coming months. According to junior finance minister, Jayant Sinha, India needs to move towards full capital account convertibility to become a leading global economy.

‘If we have to be among the top three-four economies in the world, we have to make it possible for our capital markets to be broader and deeper, and for that to happen capital account convertibility also becomes important,’ Sinha said.

The Indian Rupee also received support from the latest Wholesale Price Index (WPI) data. Wholesale prices were shown to have declined at a faster-than-expected annual rate of 2.33% in March, the fifth consecutive fall. The fall was because of tumbling oil and manufacturing prices.


Looking ahead, the Rupee could come under pressure if the latest domestic balance of trade data comes in poorly. Economists are forecasting that India’s trade deficit will widen from $-6.8 billion to $-13.2 billion.

The Rupee could also come under pressure from the release of US data. If the latest industrial and manufacturing data comes in strongly then the ‘Greenback’ will advance. Also of interest will be Friday’s US inflation data.

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