The Pound to Indian Rupee (GBP INR) exchange rate has failed to gain much ground today as markets remain concerned about fractures in the Conservative Party over its approach to Brexit.
GBP INR is currently at around 86.8244 up 0.2% from this morning’s starting levels of around 86.7585.
Sterling (GBP) Struggles as Cracks in Conservative Party Show
The Pound struggled to pull itself higher this morning as markets grew concerned about further splits in the Conservative party over its Brexit strategy as prominent Tory William Hague backed Labour’s calls for the UK to remain in the single market for a transitional period after Brexit.
Hague wrote in his column in the Telegraph;
‘The lesson of this is that it is very much worth going for a simple deal with the EU, with a couple of years when we stay in the single market and customs union and then have enough time to settle a good free trade deal.’
Markets fear that conflicting plans for Brexit amongst the Tories will undermine the government negotiations with the EU, particularly ahead of a key Brexit speech by Prime Minister Theresa May in Florence later this week.
However Sterling finally found some gains in the afternoon amidst reports that Foreign Secretary Boris Johnson may be sacked over an article he wrote over the weekend, in which he repeated controversial claims that the UK would be £350m a week better off outside the EU.
The comments have caused a stir at the top of the conservative party, with his colleagues accusing him of attempting to unseat the Prime Minister by offering his own alternative blueprint for Brexit.
Indian Rupee (INR) Weakened as Former PM Suggests Demonetisation Impacted GDP
The Indian Rupee continued to struggle following comments made by Former Prime Minister Dr Manmohan Singh on Monday as he suggested that Narendra Modi’s decision to demonetise over 80% of the nation’s currency last year has adversely impacted India’s economic growth.
The former PM also suggested that the ‘hasty’ implementation of the Goods and Services Tax (GST) was also negatively effecting India’s ‘informal’ sector.
Speaking to CNBC-TV 18 yesterday Dr Singh said;
‘Both demonetisation and the GST have had some impact. Both would affect the informal sector, the small scale sector. The sectors today are responsible for 40 per cent of GDP.’
The comments come as India’s GDP fell to 5.7% in the second quarter, the slowest rate of economic expansion since the start of 2014, with Dr Singh also previous expressing concerns that the slowing of growth could have a major knock on impact on job creation.
GBP INR Exchange Rate Forecast: UK Retail Sales Figures Ahead
Looking ahead, the GBP INR exchange rate may dip again on Wednesday as the ONS is expected to report that the UK’s retail sales growth slipped from 0.3% to 0.2% in August, prompting fears that consumer spending remains weakened by soaring inflation and anaemic wage growth.
Meanwhile the Indian Rupee is likely to remain subdued this weak thanks to a lull in domestic data, while a potential jump in the US Dollar following tomorrow’s Federal Reserve rate decision is also likely to weigh on the emerging currency.