Why is the CAD to INR Exchange Rate Up today on 14th July 2023 (1st half of July 2023)?

Key points:

• Canada Dollar to Indian Rupee Exchange Rate increases.
• The Bank of Canada has strategically implemented a rate hike, increasing interest rates. Based on our comprehensive financial analysis, it is projected that the interest rates in the Indian market are poised to witness a notable increase of 25 basis points by the year 2023.
• The anticipated upward trajectory will result in a proportional adjustment of the 6.5 percent rate, aligning with the projected benchmark.
• Both the Indian and Canadian economies have experienced a significant increase in inflation and unemployment rates in recent periods.

Based on the financial data as of June 30, 2023, it is evident that the Canadian dollar has exhibited a favorable trajectory in terms of its valuation compared to the Indian rupee. This is substantiated by the prevailing exchange rate of 1 CAD to 60 INR. The observed appreciation can be attributed to the consistent and positive trend in the valuation of the Canadian dollar over time. During the latter part of June 2023, the exchange rate between the two currencies demonstrated notable volatility, oscillating from a peak of 62.63 to a trough of 60.88. Based on our analysis, the calculated standard deviation of the trend curve amounts to 0.135 rupees. The Canadian dollar has observed a significant appreciation in light of recent fluctuations in the exchange rate. The product has witnessed a substantial depreciation in its value, experiencing a sharp decline from 5055 rupees to a nominal 60 rupees. The potential for asset overvaluation can be ascribed to trade deficits or sudden surges in demand and pricing for petroleum products.

CAD to INR Exchange Rates (1 CAD into INR)
Date	Open	High	Low	Close
Jul 03, 2023	60.8837	61.8624	60.8827	60.8837
Jul 04, 2023	61.7986	62.0538	61.726	61.8028
Jul 05, 2023	61.9329	62.0382	61.8265	61.925
Jul 06, 2023	61.97	62.0648	61.8586	61.9632
Jul 07, 2023	61.8693	62.1397	61.7547	61.8806
Jul 10, 2023	61.2371	62.1973	61.2371	61.2371
Jul 11, 2023	62.1092	62.1789	61.9777	62.1142
Jul 12, 2023	62.2267	62.3456	62.029	62.2315
Jul 13, 2023	62.1571	62.5308	62.1306	62.1287
Jul 14, 2023	62.5287	62.6261	62.1409	62.5178

Several factors affect the CAD to INR exchange rates:

1. Crude Oil
2. Commodity Prices and Import/Export
3. Interest rates
4. Inflation rates
5. Unemployment rate and Job Availability
6. Budget deficit and national debt levels
7. Politics and international policies

1. Crude Oil

Given the considerable magnitude of the country's population, it is noteworthy that this particular supplier can fulfill approximately 80% of India's yearly requirement for crude oil. The fluctuating price movements observed in the global oil market serve as a dependable indicator of the overall health and stability of the global economy. The security witnessed a decrease in its valuation, declining from 103.97 CAD on July 13, 2023, to 94.49 CAD on July 03, 2023. The passage exhibits a notable capacity for enhancement in its overall structure and content. Anticipated downward movement in crude oil prices is poised to provide a favorable environment for multiple sectors operating within the industry, including extraction, distribution, and retail. A potential strategy for augmenting the valuation of the Indian rupee would involve implementing measures focused on reducing the production of new banknotes.

Crude Oil (in CAD)
Date	High (CAD)	Low (CAD)	Close (CAD)
Jul 03, 2023	97.31	94.49	94.63
Jul 05, 2023	97.80	94.73	97.29
Jul 06, 2023	98.53	95.64	97.79
Jul 07, 2023	100.77	97.05	100.69
Jul 10, 2023	100.27	98.27	98.70
Jul 11, 2023	100.30	97.65	100.12
Jul 12, 2023	101.83	99.85	101.29
Jul 13, 2023	103.43	100.74	102.84
Jul 14, 2023	103.37	100.44	100.85

This specific asset demonstrates considerable intrinsic worth in the Canadian and other international markets. The profitability of crude oil sales typically exceeds the associated production expenses. Based on our comprehensive analysis, it is evident that the market is poised to undergo a substantial expansion and witness a notable surge in profitability by the year 2023. In the second quarter of 2022, the market value of crude oil experienced a significant surge, culminating in prices soaring to an impressive $1,754,000 per barrel. The observed wave exhibits a remarkable deviation from the average initial annual yield, which typically falls within the $1 to $1.5 billion range. The Canadian dollar has the potential to appreciate due to an increase in imported crude oil expenses.

The Indian rupee is expected to sustain a downward trajectory against Canadian and US dollars.

2. Commodity Prices and Import/Export

The interplay of consumer preferences in Canada and India significantly impacts the exchange rate dynamics between the Canadian dollar and the Indian rupee, leading to noteworthy fluctuations. The determination of the exchange rate was based on a thorough evaluation of the comparative economic strength demonstrated by both nations. Both nations exhibit a significant dependence on importing a diverse array of materials and components.

According to the most recent assessment conducted in August 2022, the Canadian energy market has been valued at $9.702 trillion. The chemical sector demonstrated a consolidated revenue of $153 million, while the plastics and rubber industry showcased a substantial income of $10.46 billion. The metal ores and concentrates segment contributed $100 million to the overall revenue, while the petroleum products industry showcased a significant increase of $4.179 billion. Throughout the designated time frame, Canadian exports demonstrated a valuation of 638.644 trillion CAD, whereas Canadian imports displayed a slightly higher figure of 653.833 trillion CAD. The Canadian currency has experienced a notable appreciation, primarily attributed to the exceptional trade surplus. Since June 2022, consumer goods prices have had a consistent downward trend. This trend has led to a cumulative decline of 32.4% in June, followed by an additional decrease of 17.6% in August and a slight reduction of 1.2% in January 2023.

Canada: Commodity Prices
Date	% change YOY
Jun-22	32.4
Jul-22	19.1
Aug-22	17.3
Sep-22	12.7
Oct-22	8.1
Nov-22	8.1
Dec-22	8.1
Jan-23	1.2
Feb-23	-5.2
Mar-23	-16.5
Apr-23	-10.8
May-23	-18.4

During the fiscal year of 2017, Canada experienced a significant trade deficit of $81.91 billion with India, indicating a considerable discrepancy between the value of imports from India and exports to the country, with imports exceeding exports by $45.02 billion. The potential depreciation of the Indian rupee may lead to increased prices due to the significant reliance on imported commodities within the country.

India: Commodity Prices
Date	Base Points change YOY)
Jul-22	173.4
Aug-22	174.3
Sep-22	175.3
Oct-22	176.7
Nov-22	176.5
Dec-22	175.7
Jan-23	176.5
Feb-23	176.8
Mar-23	177.2
Apr-23	178.1
May-23	179
Jun-23	180.1

Throughout the observed period spanning from August 2022 to May 2023, there was a notable surge in the Consumer Price Index (CPI) for goods, with an increase of 180.1 percentage points, representing a substantial escalation of 176.5 percent. The Indian rupee has undergone a considerable devaluation against both the Canadian and American dollars.

3. Interest rates

A significant portion of the Canadian population is apprehensive about the potential negative ramifications of the ongoing revitalization efforts on their financial holdings. Based on our comprehensive analysis of prevailing projections, the global economy is anticipated to exhibit a growth rate of 3.5% in the upcoming year of 2022. This will be followed by a subsequent growth rate of 2.5% in the next year of 2023 and a further growth rate of 3% in the subsequent year of 2024. The Bank of Canada has strategically implemented various comprehensive measures to effectively address and alleviate the persistent economic turbulence experienced within the Canadian economy.

The recent decision made by the central bank to raise the interest rate by 100 basis points is based on the belief that a higher inflation rate will positively affect the economy, businesses, and individuals in the future. Based on the projections provided by the central bank, it is expected that the inflation rate will demonstrate a declining trajectory, ultimately reaching a level of 2% by the year 2024. The interest rates had experienced a significant surge of more than 100% since reaching their lowest point in June and August of 2022 when they were recorded at 2.5%. In January of 2023, the interest rates stood at 4.5%. The observed increase can be attributed to the ongoing inflationary situation.

Canada: Interest Rates
Date	Rate (%)
Oct-21	0.2
Nov-21	0.2
Dec-21	0.1
Jan-22	0.15
Feb-22	0.2
Mar-22	0.45
Apr-22	0.95
May-22	0.95
Jun-22	1.5
Jul-22	2.5
Aug-22	2.5
Sep-22	3.25
Oct-22	3.75
Nov-22	4.25
Dec-22	4.5
Jan-23	4.5

In light of the prevailing inflationary pressures observed in India, the Reserve Bank of India has strategically decided to implement an interest rate hike. In July and August, we witnessed a significant increase of 50 basis points in the annual percentage rate, resulting in the current rate of 5.4%. The prevailing interest rate of 4.9%, introduced in July, is anticipated to persist without any alterations until August 2022. Based on the forward-looking estimates provided by the Federal Reserve, it is projected that interest rates will experience an upward trajectory, reaching a level of 6.5% as we near the end of the current decade. The Indian government has established an ambitious objective of achieving a pinnacle inflation rate of 3% by 2024.

India: RBI Interest Rates
Date	Rate (%)
Jun-19	5.75
Aug-19	5.40
Oct-19	5.15
Mar-20	4.40
May-20	4.00
May-22	4.40
Jun-22	4.90
Jul-22	5.40
Aug-22	5.40
Sep-22	6.15
Dec-22	6.50

In the prevailing economic landscape, the acquisition of funding has grown progressively intricate owing to heightened regulatory scrutiny and augmented oversight from the private sector. The fluctuating nature of interest rates depends on the variations observed in various economic indicators, such as inflation and market expectations. Given the ongoing presence of inflationary forces, consumers are experiencing a gradual erosion of their purchasing power, leading to a notable decrease in their discretionary income.

4. Inflation rates

Inflation poses a significant challenge to the global economy due to its far-reaching consequences on consumer spending patterns and the appreciation of currencies. The continuous expense increase leads to a corresponding decrease in disposable income accessible to individuals. The acknowledged and documented phenomenon of inflation's disparate impacts on nations has garnered significant attention. However, it is imperative to recognize that the effects of this phenomenon are only partially alleviated in every country.

Canada's prevailing annual inflation rate is a commendable 5%, establishing its position among the most elevated rates witnessed globally. Given the robust regulatory framework in Canada, it is crucial to recognize the significant influence that the COVID-19 pandemic has had on the country's economy. Following the Bank of Canada's prudent decision to raise repo rates in June 2022 as a preemptive measure to tackle inflationary pressures, we have witnessed the consequential impact on consumer prices within the Canadian economy. The consumer price index experienced a notable decrease, declining from 8.1% in June 2022 to 7.6% in July 2022. Furthermore, a noteworthy downturn has been observed, resulting in a decrease of 3.4% as of May 2023. The Canadian economy has experienced a notable boost due to the positive impacts resulting from a significant reduction in inflation within recent months.

Canada: Inflation Rates
Date	Rate (%)
Jun-22	8.1
Jul-22	7.6
Aug-22	7
Sep-22	6.9
Oct-22	6.9
Nov-22	6.8
Dec-22	6.3
Jan-23	5.9
Feb-23	5.2
Mar-23	4.3
Apr-23	4.4
May-23	3.4

The inflationary pressures observed in the Indian economy have demonstrated a persistent upward trend since September 2021, escalating the general cost of living. Following a relatively underwhelming performance in the year's initial months, the economy underwent a significant surge in growth and inflation during March, April, and May. During the Q3 of 2022, it is worth noting that there was a substantial increase in inflation, exhibiting an average upward movement of 4.7%. As of May 2023, the entity mentioned above has encountered a considerable downturn, culminating in an unparalleled milestone of 4.25% that has not been witnessed before.

India: Inflation Rates
Date	Rate (%)
May-22	7.04
Jun-22	7.01
Jul-22	6.71
Aug-22	7.00
Sep-22	7.41
Oct-22	6.77
Nov-22	5.88
Dec-22	5.72
Jan-23	6.52
Feb-23	6.44
Mar-23	5.66
Apr-23	4.70
May-23	4.25

The depreciation of the Indian rupee has necessitated the implementation of price hikes by the Reserve Bank of India (RBI) and the government of India.

5. Unemployment rate and Job Availability

The volatility observed in the unemployment rates substantially influences the purchasing power of a country's currency. The positive trend in employment rates, combined with the strategic growth of businesses through the acquisition of fresh talent, has the potential to impact the overall economic environment positively. The Canadian labor market experienced a marginal increase in the unemployment rate, rising from 5.1% in November 2022 to 5.3% in June 2023. While there was a slight decline in the unemployment rate between October and December, it is essential to acknowledge significant room for improvement, as further reductions are necessary to reach optimal levels. Moreover, enhancing job creation endeavors to address the current employment situation with utmost efficacy is crucial. The labor force participation rate has exhibited a notable upward trend since February 2022, thereby mitigating domestic investment levels and alleviating inflationary pressures. The noteworthy increase in the savings rate has been instrumental in cultivating a favorable trajectory for the overall economy.

Canada: Unemployment Rate
Date	Rate (%)
Aug-22	5.4
Sep-22	5.2
Oct-22	5.2
Nov-22	5.1
Dec-22	5
Jan-23	5
Feb-23	5
Mar-23	5
Apr-23	5
May-23	5.2
Jun-23	5.3

The unemployment rate in India experienced a significant increase in August 2022, with a notable uptick from 6.8% in the previous month to 8.2%. Based on our meticulous examination, the metric above is anticipated to experience a downward trend, ultimately converging at 6.4% by September 2022. As of May 2023, the unemployment rate stood at 7.1%, reflecting the prevailing labor market conditions. The current economic climate has precipitated a downturn in consumer confidence, leading to a notable reduction in expenditures and consequently hindering the influx of foreign currency. The strategic recruitment endeavors implemented by multinational corporations (MNCs) have played a pivotal role in maintaining a favorable unemployment rate in India.

India: Unemployment Rate
Date	Rate (%)
Jun-22	7.8
Jul-22	6.8
Aug-22	8.2
Sep-22	6.4
Oct-22	7.7
Nov-22	8
Dec-22	8.3
Jan-23	7.1
Feb-23	7.5
Mar-23	7.8
Apr-23	8.1
May-23	7.7

6. Budget deficit and national debt levels

Governments, by and large, have incurred debt with a few select exceptions. Elevated debt levels within a nation have the potential to trigger a depreciation of its currency, leading to a subsequent increase in inflationary pressures. Given the observed variance between actual spending and the initially planned levels and the impact of inflation on currency valuation, governmental entities employ a strategic approach to develop a comprehensive budget for the upcoming fiscal year.

Canada's expenditures in the first quarter of 2022 fell short of initial projections by $3.91 billion, leading to a decrease of $59 million in the nation's external debt from Q4 2022 to Q1 2023. Consequently, the Canadian dollar has experienced an appreciative trend. Based on our comprehensive analysis, it is anticipated that Canada's trade surplus will experience a notable decline, transitioning from CAD 2,372.7 million in July to a projected CAD 40 million by November 2022. The projected decrease can be ascribed to the relatively higher pace of expansion in exports in contrast to imports. The robust performance demonstrated by the Canadian dollar has been instrumental in driving the flourishing Canadian economy.

Canada: Balance of Trade
Date	CAD $ Millions
Jul-22	2372.7
Aug-22	-2535
Sep-22	8675
Oct-22	4987
Nov-22	-2187
Dec-22	-1595
Jan-23	1204.1
Feb-23	422.3
Mar-23	230
Apr-23	1940
May-23	-3439

Upon careful analysis of India's recently unveiled national budget, it becomes apparent that there has been a discernible upswing in expenditure during the inaugural quarter of 2022. As of the conclusion of the initial quarter, India's external debt reached a significant sum of USD 620 billion. Based on current projections, this particular figure is expected to undergo a slight decline and stabilize at approximately USD 614 billion by the end of the fiscal year.

The devaluation of the Indian rupee could have impacted the inflationary pressures within the economy. The persistent trade deficit observed in India calls for prudent evaluation from a financial perspective. In June 2023, Canada encountered a trade deficit of C$20.13 million, indicating a modest outcome. India's trade performance exhibited a notable downturn during July and August 2022, as evidenced by a substantial negative delta.

India: Balance of Trade
Date	CAD$ Millions
Jun-22	12.85
Jul-22	41.47
Aug-22	38.68
Sep-22	19.33
Oct-22	20.7
Nov-22	15.3
Dec-22	31.8
Jan-23	23.4
Feb-23	17.43
Mar-23	19.7
Apr-23	15.24
May-23	22.12
Jun-23	20.13

7. Politics and international policies

The interdependence of a nation's currency valuation and public confidence in its governing institutions is significant. The Indian economy has been experiencing lackluster growth, accompanied by a depreciation of the rupee, primarily attributed to various grievances directed toward the government. The detrimental effects of unfavorable media coverage have adversely impacted the economic performance of both Canada and India.

The Canadian dollar has exhibited a relatively strong performance compared to the Indian and American rupees. The currencies above have demonstrated noteworthy volatility in their valuation yet have displayed commendable resilience. The Indian rupee has experienced a decline in value, whereas the Canadian dollar has shown a favorable upward trend. The fiscal authorities of both nations stand to gain from a currency that exhibits a strong propensity for stability. However, it is crucial to recognize that despite thorough planning, the implementation of the procedure can only be guaranteed to occur sporadically. Based on a comprehensive evaluation of the current market dynamics, it is projected that the value of the rupee will demonstrate a consistent and steady trajectory over the year.