Value of the British Pound in Rupees

#1 Jan 21st, 2008, 14:27
Join Date:
Oct 2004
Location:
Chennai, India
Posts:
59,713
  • Nick-H is offline
#1
Anyone have any hope that this downward trend may end?

Is it the value of the dollar, and Britain's association with USA, that is behind the plummeting pound, or are there other reasons?
#2 Jan 21st, 2008, 14:34
Join Date:
May 2007
Location:
New Delhi, India
Posts:
7,695
  • shashank.aggarwal is offline
#2
Quote:
Originally Posted by Nick-H View Post Is it the value of the dollar, and Britain's association with USA, that is behind the plummeting pound, or are there other reasons?
How about a growing economy ??
Food Enthusiasts of Delhi

Follow us on Facebook for latest Updates -> Eatlo

Travelogue - Around India
#3 Jan 21st, 2008, 14:51
Join Date:
Mar 2007
Location:
India
Posts:
235
  • Epicure is offline
#3
Quote:
Originally Posted by Nick-H View Post Anyone have any hope that this downward trend may end?

Is it the value of the dollar, and Britain's association with USA, that is behind the plummeting pound, or are there other reasons?

It depends on various factors viz., value of imports , interest rates, inflation etc.

The possible causes of sterling depreciation could be (even though i am not an expert in foreign exchange management)


High UK inflation – UK will sell less exports because they are now too expensive (causing a fall in the demand for sterling). The UK will buy more imports because they are now cheaper than UK goods (causing an increase in the supply of sterling).

A fall in UK interest rates – The UK will attract less foreign investment (causing a fall in the demand for sterling). UK residents will now invest money in foreign banks which now have more attractive rates than domestic banks (causing an increase in the supply of sterling).

Speculation – Traders lose confidence in the pound expecting it to fall in value, this w ill mean they will sell sterling (causing an increase in the supply of sterling) and they will not wish to buy sterling (causing a fall in the demand for sterling).

UK goods become less competitive – If foreigners no longer wish to but UK products due to quality issues, changes in tastes etc. then the demand for sterling will fall.

Quote:
Originally Posted by Nick-H View Post Anyone have any hope that this downward trend may end?
at least for the year 2008, no
Last edited by machadinha; Jan 21st, 2008 at 16:43.. Reason: merged posts
#4 Jan 21st, 2008, 15:15
Join Date:
Oct 2004
Location:
Chennai, India
Posts:
59,713
  • Nick-H is offline
#4
Quote:
Originally Posted by shashank.aggarwal View Post How about a growing economy ??
The Rupee is worth more pounds, so the pound is worth less Rupees --- yes, I suppose that that is true.

So is it the desirability of the Rupee, or the dull face of the pound?

Or both...

Inflation in UK is not high; it is very low. I haven't noticed interest rates there falling in the last year, in fact I think they have risen slightly.
#5 Jan 21st, 2008, 16:40
Join Date:
Sep 2005
Location:
Cabarete
Posts:
797
  • kidsan is offline
#5
what are you getting for the pound now Nick? It was 83/84 just over a year ago when i was last there (but only around 74 in 2006 i think)
#6 Jan 21st, 2008, 18:01
Join Date:
Mar 2004
Location:
England
Posts:
1,262
  • shere is offline
#6
Its down to the fall in interest rates and general slow down in the UK economy.

But remember if India wants to export more then they may depreciate the rupee via fiscal policy etc.

Live rates at 2008.01.21 12:30:36 UTC
1.00 GBP = 76.9604 INR
#7 Jan 21st, 2008, 19:49
Join Date:
Jul 2006
Location:
London
Posts:
131
  • anu_k is offline
#7
yes nick, where the US dollar goes the british pound does seem to follow.

the effects of last yr's credit crunch is now being seen.
housing market is slowing down.
borrowing is expensive with the BoE holding interest rates at 5.5%.
fuel prices are going up with ~15% increases announced by the major gas and electricity providers.
people are just not spending as much (or we are talking ourselves into a recession, which is also a possibility).

the bright side is its great for the british export market!

i expect interest rates will be cut soon to avoid a slowdown in the economy.
but for the moment the strength of the pound is nose-diving!
#8 Jan 21st, 2008, 20:00
Join Date:
Jul 2006
Location:
London
Posts:
131
  • anu_k is offline
#8
oh its not just against the rupee... the british pound against the euro.... ouch!
#9 Jan 21st, 2008, 20:30
Join Date:
Feb 2007
Location:
Cymru
Posts:
1,170
  • Mickey S is offline
#9
Sterling is under considerable pressure on all fronts at the moment, but this is after many years during which it has been overvalued against almost every other major world currency.

The main concern right now for foreign currency traders is that the Bank of England will be forced to cut interest rates again soon. If interest rates fall then the currency becomes less attractive to investors, who will therefore not be willing to pay as much for the currency as they had been.

The outlook for the British economy is also uncertain due to rising inflation and the credit squeeze.

It's not at all true to say that Sterling follows the dollar. If that were true then the /$ exchange rate would remain in a very tight band, whereas in fact over the past 25 years or so the value of the pound has fluctuated wildly between $1 and $2.20.

A weaker pound is not a bad thing, though. It should boost exports and reduce imports, leading to increased industrial production, a stronger balance of payments account and a stronger economy. Balanced against this, getting fewer rupees on holiday is a rather trivial worry, especially when the cost of living in India is so low anyway.
#10 Jan 21st, 2008, 21:20
Join Date:
Jul 2006
Location:
London
Posts:
131
  • anu_k is offline
#10
no agreed... sterling does not follow the dollar.
but in this instance i would say there is a link. the US sub-prime mortgage crisis has affected UK financial services - directly linked to housing market slowdown, reduced consumer spending etc...

but i'm not an economist so i won't speculate any further ;o)
#11 Jan 21st, 2008, 22:43
Join Date:
Oct 2004
Location:
Chennai, India
Posts:
59,713
  • Nick-H is offline
#11
Yeahh... getting fewer rupees to me is a major worry, as I'm not looking at the marginal effect on the cost of a holiday.

Like: pounds in England; do I get them out now before it gets much worse, or decide it'll probably be on the way up again in a month ...or a year ...or two.

Interest input, people. Thanks for your thoughts. More are welcome!
#12 Jan 21st, 2008, 23:37
Join Date:
Jun 2003
Location:
England
Posts:
630
  • Anders is offline
#12
The reality is that nobody knows what direction the exchange rate will have in the future. If someone actually did know then he would be making loads of money on currency futures and he sure would not tell you for free.
#13 Jan 21st, 2008, 23:51
Join Date:
Oct 2004
Location:
Chennai, India
Posts:
59,713
  • Nick-H is offline
#13
Just what I thought, too!

Worth a try, to pick people's brains, though. I'm already learning from it.
#14 Jan 22nd, 2008, 00:00
Join Date:
Jan 2008
Location:
UK
Posts:
293
  • Rasika is offline
#14
At least the Indian government makes it easier on tourists: no buying Rupees abroad, so no point worrying about it before arriving in India. Om Shanti Om.

Now, whether to pick up a bit wad at the airport or little bits as you go is another story...
#15 Jan 22nd, 2008, 00:05
Join Date:
Oct 2004
Location:
Chennai, India
Posts:
59,713
  • Nick-H is offline
#15
It doesn't make it easy for us residents with a little capital still left outside India, though!

Similar Threads

Title, Username, & Date Last Post Replies Views Forum
help - US$ or IN. Rupees May 20th, 2010 20:50 11 2812 For Citizens of Other Countries - Visa and PIO/OCI Questions
How many rupees to the pound TODAY? Sep 15th, 2007 17:23 20 14551 Packing Tips for India travel
Rupees per day Jul 4th, 2007 10:39 2 1051 India Travel Itinerary Advice
Getting rupees in UK Oct 12th, 2005 02:56 20 18542 Delhi
rupees r us Nov 29th, 2004 17:41 0 963 Chai and Chat


Posting Rules

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
Forum Rules»
Trackbacks are Off
Pingbacks are Off
Refbacks are Off
Thread Tools
Display Modes

Search Engine Optimization by vBSEO 3.3.2
© IndiaMike.com 2014
Page Load Success