GBP/INR has little changed since Friday, finding a strong support level at around 92.500. Currently, one British pound buys 92.488 Indian rupees as of 6:10 AM UTC.
Markets in the UK are closed in observance of the Bank Holiday while Indian markets are closed on a religious holiday. The volume index shows the lowest figures since the New Year.
Both the British and Indian economies are struggling amid the COVID pandemic and the consequent lockdown measures.
Yesterday, business analysis provider Dun & Bradstreet said in a report that the Indian economy would likely fall into recession in the third quarter of the current fiscal year, as lower consumption and a surge in unemployment would delay recovery. The pace of recovery depends on the efficacy of the government’s stimulus programmes, the latest report titled ‘Economic Observer’ says.
Dun & Bradstreet India Chief Economist Arun Singh commented:
“The multiplier effect of the stimulus measures on the economy will depend on three key aspects i.e. the time taken for effecting the withdrawal of the lockdown, the efficacy of implementation and duration of execution of the measures announced.”
The report stressed that the government’s support package, whose total value exceeded expectations, is likely to push the restart of the economy. Last week, the Reserve Bank of India cut the interest rate to 4% from 4.40% and extended the moratorium period for all loans by another three months.
Nevertheless, Singh noted that the stimulus measures are focused on the supply side of the economy, which is why a negative GDP performance in the third quarter might not be avoided.
Johnson Defends Senior Adviser Amid Scandal
In the UK, the pound might be under pressure amid the political scandal involving Prime Minister Boris Johnson’s senior adviser Dominic Cummings. He had reportedly travelled in March when his wife was ill with COVID and thus breached the lockdown rules. Cummings, who is regarded as one of the main architects of Brexit, is supported by the PM himself, sparking debates even inside the Conservative Party.
Johnson said that his adviser followed the “instincts of every father,” as he travelled to his children.
“I believe that in every respect he has acted responsibly and legally and with integrity,” the PM said.
The looming scandal overshadows discussions about easing lockdown measures. Government officials said that primary schools would open doors on June 1.
