Pound Sterling to Rupee Forecast: RBI Support Puts 127.60 in Focus

Published: Thursday, 6 August 2026 21:20 BST - Written by Minesh Chaudhari

STORY LINK Pound Sterling to Rupee Forecast: RBI Support Puts 127.60 in Focus

The Pound to Rupee exchange rate (GBP/INR) held near 128.24 on Thursday evening, edging 0.1% higher on the day but remaining around 0.3% below last Friday’s close.

The Indian Rupee has steadied following Reserve Bank of India intervention and a retreat in oil prices, while Sterling’s support from stronger UK services data has been offset by fading Bank of England rate-hike expectations.

GBP/INR Forecasts: 128 level in focus

MUFG expects the Indian Rupee to strengthen during the second half of 2026, forecasting USD/INR at 94.00 during the third quarter.

According to MUFG; “We have shifted our USD/INR forecast profile higher, but still directionally expect INR to strengthen in 2H 2026.”

The bank expects USD/INR to trade between 94.00 and 95.00 over the next three to six months before moving back towards 96.00 over the medium term.

At current Sterling-Dollar levels, MUFG’s USD/INR range would be consistent with GBP/INR trading around 126.60–128.00, assuming GBP/USD remains broadly unchanged.


This is an implied cross-rate range rather than a direct MUFG forecast for GBP/INR.

GBP/INR was quoted at 128.24 after retreating from July’s high near 130.81.

The pair gained 2.55% during July, but has edged lower during August and recently tested support close to 127.63.



MUFG expects intervention and new capital inflows to limit further disorderly Rupee losses.

The bank commented; “Our bias is that intervention and prospective FCNR(B)-related inflows should limit disorderly depreciation.”

The Reserve Bank of India left its repo rate unchanged at 5.25% this week, with all six policymakers voting to maintain a neutral stance.

The RBI also cut its average inflation forecast for the current financial year from 5.1% to 5.0%, while lowering its core inflation projection from 4.7% to 4.3%.

Its growth forecast was raised from 6.6% to 6.7%, reflecting confidence that domestic demand will remain resilient.

The central bank’s measures to attract foreign currency deposits and overseas borrowing have generated more than $41bn of inflows.

Governor Sanjay Malhotra also pledged to continue “curbing excessive volatility, checking speculative behaviour and preventing disorderly movements.”

The Rupee ended Thursday around 95.22 against the US Dollar, with importer demand limiting gains despite Brent crude remaining below $80 a barrel.

ANZ remains cautious over the currency’s near-term prospects.

According to the bank; “Relatively low Indian rates continue to make the INR easier to short during adverse risk events.”

ANZ expects the RBI to deliver two quarter-point increases beginning in December, although reduced expectations of immediate tightening have already lowered Indian forward-market yields.

Sterling has received some support from the final UK services PMI, which increased from 48.8 to 52.1 in July.

The composite index also returned to growth at 52.2, with Pantheon Macroeconomics describing the overall business survey as healthy.

Pantheon nevertheless remains cautious over further Bank of England tightening.

It commented; “We are comfortable assuming Bank Rate on hold through end-2027 still, but the PMI suggests rate hikes are becoming less likely.”

MUFG’s Rupee forecast leaves the GBP/INR exchange rate vulnerable to another test of 127.63, particularly if oil prices remain contained and RBI-linked capital inflows strengthen.

A break below this level would increase the possibility of a move into the implied 126.60–128.00 region.

Renewed oil gains or a deterioration in global risk appetite could instead weaken the Rupee and allow GBP/INR to recover, although a return to July’s 130.81 high would require a more substantial reversal in Indian currency sentiment.

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TAGS: Pound Rupee Forecasts