GBP/INR has slightly declined in early trading on Monday. Currently, one British pound buys 93.628, down 0.38% as of 6:10 AM UTC.
GBP/INR touched a daily low at 92.854.
Last week, the price hasn’t seen a bearish day at all. In fact, it has had six bullish sessions in a row, gaining over 9% and recovering most of the previous losses. Now the price is trying to break above a resistance zone and maybe consolidate above 94.000.
British Firms Were Pessimistic Even Before Shutdown Measures
So far, the rupee proves to be resilient for now. Yesterday, the UK’s Confederation of British Industry (CBI) said that British firms operating in key industries were already expecting the most difficult period since 2009 even before the shutdown measures imposed last week.
CBI’s polls carried out in the first half of the month showed that consumer services companies, including restaurants, bars, and cinemas, were the most pessimistic. The indicator of their expectations for business volumes for the next three months was at -47%. Elsewhere, the measure for manufacturers stood at -20%, and retail sector’s sales expectations tumbled to -31%.
Alpesh Paleja, the CBI’s lead economist, commented:
“Expectations of a sharp fall in activity give some sign of what is to come. With strict social distancing measures still to be reflected in our data, the picture is only likely to deteriorate from here.”
Some companies expected growth, including business and professional services firms.
Reuters Poll: India’s Economy to Slow Even Further
However, the GBP/INR pair might rebound and continue its growth, as the Indian economy will be hit by the pandemic. The country’s already-slowing economy has likely contracted to an eight-year low, according to a recent survey conducted by Reuters. What’s even more worrying is that the economy is expected to slow even more sharply.
Last week, Prime Minister Narendra Modi enforced a three-week lockdown that would surely hit many businesses.
ING economist Prakash Sakpal commented:
“Just as everywhere else in the world, the Indian economy is bracing for the fallout (from) this unprecedented event. We expect the lockdown to dramatically reduce GDP in subsequent quarters, while there will be prolonged economic gloom throughout the rest of the year.”
Economists surveyed by Reuters expect the country’s GDP to expand by 4.0% year-on-year in the current quarter, down from 4.7% seen in the three months to December 2019.