GBP/INR is slightly bullish on Wednesday, though the pair has been trading sideways since the end of March. Currently, one British pound buys 93.605, up 0.40% as of 6:00 AM UTC.
The Indian rupee is declining as investors assess the potential impact of the lockdown measures imposed by the government on March 25. Besides, the global recession will affect the Indian economy as well. Rating agencies and research firms have downgraded India’s economic growth forecast for the second time in less than a month.
Standard Chartered, Crisil, and Icra have reviewed their outlook for the fiscal year 2020-2021.
Crisil said at the beginning of the month:
“Intensifying Covid-19 pandemic and a looming global recession have cast an unprecedented cloud over the credit quality outlook of India, which has already been impacted by a slowing economy. This has forced CRISIL to slash its base-case gross domestic product (GDP) growth forecast for fiscal 2021 to 3.5%.”
Last month, it had reduced its growth forecast from 5.7% to 5.2%.
Icra and Standard Chartered are even more pessimistic. The former revised its March prediction for fiscal year 2021 from 4.7-5.2% to 2, while the British bank downgraded the outlook from 4.4% to 2.7%.
Johnson Remains in ICU, Condition is “Stable”
Elsewhere, the sterling extended its gains against the rupee as investors reacted positively on the news that UK Prime Minister Boris Johnson remained in the intensive care unit, but his condition was stable.
UK Foreign Secretary Dominic Raab told media:
“He’s receiving standard oxygen treatment and breathing without any assistance, he’s not required any mechanical ventilation or non-invasive respiratory support.”
He added that the PM was in good spirit and that he was confident that Johnson would recover. The next updates about the PM’s condition will be released in the evening.
However, the pound will remain under pressure as the UK reported the highest daily number of COVID-related deaths on Tuesday, as the death toll rose by 854. The good news is that the number of new cases continues to decline. So far, the pandemic has hit more than 51,000 people in Britain, killing about 5,400.
