Sterling

Sterling — formally known as Pound Sterling — is the official currency of the United Kingdom (£, currency code GBP) and one of the world's most widely traded and historically significant currencies. The term 'sterling' derives from the Old Norman French 'esterlin' (a small star) — referring to the silver stars on early Norman pennies. Sterling is the world's fourth largest reserve currency and the third most traded currency in the global foreign exchange market. The Bank of England sets Sterling monetary policy through its Monetary Policy Committee (MPC), targeting 2% inflation. For Indian markets, Sterling is significant as the currency of one of India's largest trading partners and home to one of the largest Indian diaspora communities globally. GBP/INR currency futures and options are actively traded on NSE and BSE — with the contract size standardised at GBP 1,000 per lot, enabling Indian businesses to hedge Sterling receivables and payables efficiently on regulated Indian exchanges rather than accessing OTC forex markets. Indian IT services companies — including TCS, Infosys, Wipro, and HCL Technologies — derive 10% to 20% of their revenues from UK clients, making Sterling movements a material factor in their quarterly results. The Brexit referendum of June 2016 caused the sharpest single-day Sterling decline in decades — falling over 10% against the rupee — highlighting the political sensitivity of Sterling's valuation to UK-EU relationship developments.