- Pound (GBP) rebounds after losses in previous session
- IMF sees UK GDP growth 5.3%
- Indian Rupee (INR) declines as covid cases hit 115,000
- RBI keeps interest rates on hold
The Pound Indian Rupee (GBP/INR) exchange rate is pushing higher on Wednesday, paring losses from the previous session. The pair settled -0.3% lower on Tuesday at 101.58, snapping a three day winning streak. At 08:45 UTC, GBP/INR trades +0.4% at 101.71, towards the lower end of the daily traded range.
The Pound looks ahead to the reopening of the UK economy on 12th April amid a strong vaccine rollout and falling covid numbers.
The International Monetary Fund (IMF) upwardly revised its GDP forecast for the UK. The IMF now predicts that the UK economy will grow 5.3% in 2021, up from the previous forecast of 4.5% made in January.
The UK was one of the hardest hit from covid in both terms of the death toll and economically speaking. The UK GDP contracted 10% last year with only Spain and Argentina performing worse. However, the UK’s rapid vaccine programme has changed the UK’s fortune’s rapidly. Almost half of the UK adult population has had a covid jab boosting the prospects of a steady reopening.
Attention will now turn to the UK service sector PMI data which is expected to confirm the preliminary March reading at 56.8. The figure 50 separates expansion from contraction.
The Reserve Bank of India, as expected, kept interest rates on hold at record lows amid growing fears that the resurgence of covid could derail the fragile economic recovery.
The RBI held the repo rate at 4% and kept the reverse repo rate, the borrowing rate unchanged at 3.35%.
The Indian central bank had cut the repo rate by 115 basis points since March 2020 to soften the hit from the pandemic.
Meanwhile, the number of covid cases in India continues to grow exponentially with 115,736 new covid cases being recorded on Wednesday. This takes the total number of covid cases to 12.80 million.
The IMF projects that India will see economic growth of 12.5% in 2021. This would be stronger than economic growth in China.