GBP/INR is trying to recover after losing over 2.50% since the start of the month. Yesterday, the pair touched the lowest level since January 15 at 91.993. Currently, one Pound sterling buys 92.225 Indian rupees, up 0.17% as of 6:10 AM UTC.
The Indian currency has weakened in early trading on Friday after a survey carried out by the Reserve Bank of India (RBI) showed that the consumer sentiment had worsened to the lowest in five years. RBI’s index called current situation declined to 83.7 last month, the lowest since March 2015. The 100 mark separates pessimism from optimism.
A separate survey showed that capacity utilization at Indian firms declined to 69.1% in the second quarter of the financial year ending March. This is the lowest level on record.
The central bank said in its report:
“Current perception on the general economic situation, price levels and household income remained weak when compared with the position a year ago.”
Yesterday, we reported that the RBI maintained the interest rates unchanged at 5.15%, which is the lowest in about 10 years. While India is still struggling with an economic slowdown, the central bank didn’t want to cut the rate again, citing inflationary pressures. Policymakers will consider more unconventional approaches to ease borrowing costs and support demand.
Elsewhere, the pound has benefited from a series of positive reports. For instance, accountancy firm BDO said earlier today that its High Street Sales Tracker, which measures retail sales, found sales surged by 5.7% in January year on year, which is the biggest increase since January 2014. However, BDO warned that the jump in sales might not suggest a genuine revival in retail sales.
Sophie Michael of BDO commented:
“This may be a false dawn in terms of a high street recovery. February will show whether consumer confidence has got a toehold in some kind of recovery for retail.”
Yesterday, the National House-Building Council (NHBC) said that the number of housing starts last year rose to the highest since 2007. New home registrations increased by 1% in 2019 to 161,022.
