The Pound to Indian Rupee (GBP INR) exchange rate fluctuated on Monday as SNP leader Nicola Sturgeon announced she would be seeking a second referendum on Scottish Independence
GBP INR is currently trading around 80.90 after briefly spiking to 81.22 earlier in the morning.
Pound (GBP) Weakened as Sturgeon Seeks Scottish Independence
The Pound (GBP) softened this afternoon as Scottish First minister Nicola Sturgeon announced she will table a vote in the Scottish parliament to discuss the possibility of a second independence referendum.
Sturgeon is seeking to hold the vote late 2018 or early 2019 as she argues that the UK government’s plans for a hard Brexit should not include Scotland after the country overwhelming voted to remain in last year’s EU referendum.
While Prime Minister Theresa May is yet to officially comment on the announcement her official spokesperson responded by saying;
‘Only a little over two years ago people in Scotland voted decisively to remain part of our United Kingdom in a referendum… Another referendum would be divisive and cause huge economic uncertainty at the worst possible time.’
However with the PM unlikely to refuse the referendum due to political pressure, markets fear that the UK will now face the twin pressures of leaving the EU and a possible split in the union as ministers suggest the chances of Scotland voting for independence to be ’50-50’.
Indian Rupee (INR) Gains as Modi Claims Victory in State Elections
The Indian Rupee appreciated on Monday as Prime Minister Narendra Modi’s Bharatiya Janata Party claimed a landslide victory in the Uttar Pradesh state elections, winning 312 of the 403 seats in the assembly.
The win helps to secure his second term in 2019 and was seen by observers as an endorsement of his economic reforms, which included the demonetising of over 80% of the countries cash late last year.
The overwhelming victory should pave the way for further reforms from Modi, and is expected to be treated ‘very positively’ by markets according to Vivek Rajpal, a rates strategist at Nomura Holdings Inc.
With India’s economic growth reaching at least 7% or more over the last four quarters, should Modi’s administration continue to deliver upon its current economic success the Rupee is likely to see some solid gains over the next year.