The GBP/INR currency pair is the abbreviation for the British pound sterling and the Indian rupee. The GBP/INR is influenced by the economic, political, and monetary dynamics of both nations.
India’s economy, with its high growth potential, expanding middle class, and strategic position as a global manufacturing and technology hub, is attracting significant foreign investment, which influences the rupee. On the other hand, the British pound is backed by a mature financial system and the stability of the UK’s developed economy.
GBP/INR is popular among traders seeking to capitalise on the volatility that stems from India’s dependency on crude oil imports, fiscal policies, and structural reforms, as well as the pound’s response to Bank of England decisions and broader geopolitical developments.
GBP/INR Performance & Price Chart
The GBP/INR pair has experienced some volatility in recent years. However, after a low in September 2022, the pair has steadily trended higher, and in September, it reached a significant high before pulling back. its highest level
GBP/INR rose ~1.2% through 2024.
| Timeframe | Performance |
|---|---|
| 3 Months | -3.83% |
| 6 Months | +0.72% |
| Year-to-Date | +1.21% |
| 1 Year | +1.29% |
Other Currency Pairs
GBP/INR Forecast
Forex.com senior market analyst Fiona Cincotta told investors in a recent article that she expects the UK economy to continue to grow in 2025. However, the analyst added that there are potential economic headwinds. She stated: “GDP could be weaker than the 1.5% forecast by the BoE owing to several key factors, including uncertainty surrounding trade and a less expansionary UK budget.”
Elsewhere, analysts at Nomura said in their recent outlook for the British pound that they expect it “to continue to gain ground gradually against other currencies where their respective central banks are more concerned about the downside risks to growth rather than sticky price pressures.”
For the Indian rupee, bullish investors may look to India’s strong economic growth, combined with foreign investment inflows and RBI interventions, to stabilise the rupee. Additionally, a decline in oil prices or an improving trade balance would be positive for the rupee. In August 2024, Fitch “affirmed India’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BBB-‘ with a Stable Outlook.” The firm said India’s “ratings are underpinned by its strong medium-term growth outlook,” while the country has a “solid external finance position.”
Meanwhile, S&P Global Ratings recently said that the Indian economy is set for resilient growth in 2025. This is based on its outlook of steady services sector growth, strong urban consumption, and ongoing investment in infrastructure. Furthermore, they believe that increased labour force participation, as well as infrastructure and technology improvement and stronger public and household balance sheets, will help to support economic growth in the country.
Our View: Overall, the GBP/INR may be seen as a compelling pair for traders. However, they should be mindful of the potential for wider spreads and the rupee’s sensitivity to global risk sentiment and commodity prices. Proper risk management is essential when trading this volatile pair. Below are some aspects traders should consider when assessing the pair.
Trading the GBP/INR
Reserve Bank of India Intervention: The RBI states it “has intervened occasionally to maintain orderly conditions and curb excessive volatility in the foreign exchange market.”
Spreads: As mentioned, due to potential volatility and/or low liquidity, brokers will tend to have a wider spread on the pair, which can impact trading strategies and potential profits.
Analyse Global Risk Sentiment: The rupee is highly sensitive to shifts in risk appetite, particularly during periods of heightened global uncertainty.
Monitor Oil Prices: India is a major oil importer. Therefore, fluctuations in crude prices can impact the rupee.
Economic Trends: Both bullish and bearish traders should evaluate the macroeconomic outlook for the UK and India, including monetary policy and trade balances. For the INR, it benefits from India’s robust GDP growth, which bolsters investor confidence. However, structural challenges such as unemployment may offset these gains.
