inr-exchange-rates - INR

Pound to Indian rupee rate is declining on Thursday, though it remains to be seen if it’s only a temporary correction.

GBP/INR has gained about 2.5% since Friday, touching the highest level since January 8. However, the Thursday session is bearish for now, with the pair losing 0.34% to 94.314 as of 5:50 AM UTC.

UK Reports Biggest Daily Jump in Coronavirus Cases

While the downtrend might be explained by technical analysis factors given that a correction is opportune, the sterling is under pressure as Britain saw the biggest daily increase in the number of new cases of coronavirus infections on Wednesday, bringing the total number to 85.

Yesterday, Bank of England (BoE) Deputy Governor Ben Broadbent said that the central bank might need to provide extra help to local companies until the coronavirus threats fade. He admitted that the epidemic might have a very significant impact on the British economy. Nevertheless, judging by previous outbreaks, this could also be a temporary problem that should not touch the long-term potential of businesses. Broadbent added:

Precisely for that reason, there may therefore be a role for economic policy to support activity and the provision of credit in the meantime, in order to ensure that short-term disruption doesn’t result in longer-term damage.”

Earlier on Wednesday, Andrew Bailey, who is about to replace Mark Carney as BoE Governor, said that financial help was needed indeed, and it should be done as soon as possible to support specifically those businesses whose operations were hit by the virus outbreak. However, the central bank should not hurry with easing the policy but rather wait until it has more clarity about the virus effect.

India’s Services Firms See Activity Boost

Elsewhere, the Indian rupee might still profit from the positive services industry data. Yesterday, IHS Markit said that the country’s services business activity index increased last month to 57.5 from 55.5 in January, which is the fastest expansion in services output since the first month of 2013. India saw another increase in new export orders and increasing business confidence.

Pollyanna de Lima, principal economist at IHS Markit, commented:

Growth in India’s services sector accelerated further halfway through the final quarter of fiscal year 2019-20, with the trend for business activity improving in each month since last September when the sharpest contraction for 19 months was recorded.”


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