Why is the CAD to INR Exchange Rate Up today on 15th December 2022 (1st half of December 2022)?

Updated on: 2022-12-19 - 10 mins read
Crude OilImport & ExportInterest RatesInflation RatesRemittance NewsExchange Rate AnalysisExchange Rate ForecastCAD to INR Exchange RateCommodity PricesUnemployment Rates
Why is the CAD to INR Exchange Rate Up today on 15th December 2022 (1st half of December 2022)?

Key points:

  • The CAD to INR exchange rate is up in the first half of December 2022.
  • Bank of Canada has increased the interest rates to 3.75% .
  • Unemployment and inflation rates have increased in India.

The value of one Canadian dollar compared to one Indian rupee has risen steadily over the past five years. As of November 30, 2022, one Canadian dollar is equivalent to 60.43 Indian rupees. On December 13 of that year (2022), the price reached a high of 61.04. Nonetheless, the low point was 59.79 on December 12, 2022. The average value of one Canadian dollar in Indian rupees is 60.81. The trend curve has been all over the place for the past two weeks, with a standard deviation of 0.112 rupees. The value of the Canadian dollar has recovered, as evidenced by recent fluctuations in exchange rates. A price of sixty rupees or more is justified. Previously priced at 50–55 rupees, this item is now priced at 60. Possible causes include a strong currency, a trade and foreign capital imbalance, and increased gas prices.

CAD to INR Exchange Rates (1 CAD into INR)
Date Open High Low Close
Dec 01, 2022 60.61 60.66 60.27 60.61
Dec 02, 2022 60.34 60.52 60.09 60.37
Dec 05, 2022 59.69 61.00 59.69 60.39
Dec 06, 2022 60.21 60.69 60.20 60.21
Dec 07, 2022 60.38 60.56 60.12 60.37
Dec 08, 2022 60.16 60.63 60.01 60.16
Dec 09, 2022 60.46 60.58 60.19 60.47
Dec 12, 2022 59.79 60.55 59.79 60.35
Dec 13, 2022 60.58 61.04 60.52 60.58
Dec 14, 2022 60.73 60.91 60.65 60.74
Dec 15, 2022 60.82 60.95 60.67 60.83

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

India is home to a sizable population. Imports meet more than 80% of India's crude oil requirements. There have been many shifts in the global economy, as the cost of crude oil has demonstrated. The cost increased to C$111.78 on December 1, 2022. Since November 16, 2022, the prices have fluctuated up and down the trend line. On December 9, 2022, prices hit a low of 95.29 Canadian Dollars. An optimistic interpretation is possible, but the fact that it evolves disproves its value.

It might be less expensive and more convenient to produce, transport, and sell if the price of crude oil drops. With less money being printed, the Indian rupee might increase in value.

Crude Oil (in CAD)
Date High (CAD) Low (CAD) Close (CAD)
Dec 01, 2022 111.78 107.20 108.93
Dec 02, 2022 110.46 107.01 107.45
Dec 05, 2022 111.21 103.21 103.42
Dec 06, 2022 105.82 99.75 100.89
Dec 07, 2022 102.89 97.93 98.29
Dec 08, 2022 102.97 97.07 97.54
Dec 09, 2022 99.16 95.29 96.57
Dec 12, 2022 101.03 95.93 99.91
Dec 13, 2022 104.09 99.79 102.76
Dec 14, 2022 105.39 101.53 104.75
Dec 15, 2022 105.38 102.07 103.13

Crude oil is also crucial to Canada. Typically, they make more money off crude oil sales than they lose on production. It's expected that by 2022, however, they'll be importing even more than they do now. They imported crude oil valued at CAD 1,754,000.00 in the second quarter of 2022. In most cases, it ranges from $1 billion to $1.5 billion, significantly higher than their initial earnings. The rising cost of imported crude oil could be good news for the Canadian dollar's value against the US dollar.

Contrarily, the performance gap between the Indian dollar and the Canadian dollar versus the US dollar indicates that the value of the rupee versus the CAD may continue to decline.

2. Commodity Prices and Import/Export

Things have been purchased from other countries by both India and Canada. Minerals and metal ores, petroleum products, plastics and rubber, chemicals and energy sources, and more all fall into this category. All of the above significantly impact the CAD/INR exchange rate. It's mainly because the overall trade deficit affects how the currency performs against the US dollar.

Canada spent 9,702,000,000 Canadian dollars on energy products in August 2022. It also spent 1046 million Canadian dollars on products made of plastic and rubber, 1553 million Canadian dollars on chemicals, 1007 million Canadian dollars on metal ores and concentrates, and 4179 million Canadian dollars on refined petroleum products. Canada made a total of 638,644,000,000,000 CAD in August 2022 and spent a total of 65383,000,000 CAD. The fact that the Canadian dollar is strong compared to the US dollar shows that exports and imports are different in a good way. Aside from that, prices have decreased from 32.4% in June 2022 to 17.6% in August 2022 and 9% in October 2022.

Canada: Commodity Prices
Date % change YOY
Nov-21 37.6
Dec-21 29.3
Jan-22 30.6
Feb-22 30.3
Mar-22 42.6
Apr-22 38.3
May-22 37.6
Jun-22 32.4
Jul-22 19.1
Aug-22 17.3
Sep-22 11
Oct-22 9

India also sent the same things. Everything that India sent to Canada was worth 81.91 billion Canadian dollars. But India only sent out goods worth 45.02 billion Canadian dollars. This significant difference between what India buys and what it sells has led to a low GDP, which has caused inflation and made the Indian rupee worth less.

India: Commodity Prices
Date Base Points change YOY)
Nov-21 166.7
Dec-21 166.2
Jan-22 165.7
Feb-22 166.1
Mar-22 167.7
Apr-22 170.1
May-22 171.7
Jun-22 172.6
Jul-22 173.4
Aug-22 174.3
Sep-22 175.3
Oct-22 176.7
commodity -prices-india-from-nov-2021-to-oct-2022

Because of inflation, prices of goods change. Prices for goods have increased greatly, from 174.3 basis points in August 2022 to 176.7 basis points in October 2022. Compared to the US dollar and the Canadian dollar, it shows that the Indian rupee is not doing well.

3. Interest rates

People in Canada expect prices to rise. They also hope that getting the economy back on track will cost more. In 2022, the world economy should grow by 3.5%, in 2023 by 2%, and in 2024 by 3%. The Bank of Canada has taken steps to help Canadians deal with the effects of their country's bad economy.

When interest rates went up by 100 basis points was one example. When the more significant effects of rising inflation rates are considered, the bank thinks this will be good for people, businesses, and consumers. They want it to be at most 2% by 2024. As inflation rates rise, interest rates will go up sharply in March 2022. The rate went up by 0.75 percentage points, from 2.5% in June and August 2022 to 4.25% in November 2022.

Canada: Interest Rates
Date Rate (%)
Aug-21 0.2
Sep-21 0.2
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

The Reserve Bank of India did the same thing after that. The Reserve Bank of India raised rates by 50 basis points. Rates have increased from 4.9% in June 2022 to 5.4% in July and August this year. Interest rates will have gone up even more by December 2022. India wants inflation to drop from 6% to less than 3% by 2024.

India: RBI Interest Rates
Date Rate (%)
Feb-19 6.25
Apr-19 6.00
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

The government and private institutions are making it harder for people to get money. Interest rates directly affect inflation, and inflation immediately impacts interest rates. When prices go up, money is worth less.

4. Inflation rates

The inflation rate shows how healthy money is and how much it is worth. When prices go up, money is worth less. Inflation is a problem for almost every economy right now. The effects hurt some countries, but others can handle them.

The inflation rate in Canada has also risen a lot. The rate of inflation went up by 5% in one year. Canada was one of the places that were hurt the most by the coronavirus outbreak. The rules set by the government were so strict that factories couldn't grow, which was terrible. It's clear because inflation rates are going up. Even though the Bank of Canada raised repo rates in June 2022 to fight inflation, the inflation rate has gone down from 8.1% in June 2022 to 7.6% in July 2022 and 6.9% in October 2022. Since inflation has gone down, Canada's economy is doing well.

Canada: Inflation Rates
Date Rate (%)
Nov-21 4.7
Dec-21 4.8
Jan-22 5.1
Feb-22 5.7
Mar-22 6.7
Apr-22 6.8
May-22 7.7
Jun-22 8.1
Jul-22 7.6
Aug-22 7
Sep-22 6.9
Oct-22 6.9

Since September 2021, prices in India have been going up. At the start of 2022, growth seemed to slow, but inflation rates shot up in March, April, and May. After declining in July 2022, inflation rates went up in September 2022, from 6.71% to 7.41%. But in October 2022, it will only be 6.7%.

India: Inflation Rates
Date Rate (%)
Oct-21 4.48
Nov-21 4.91
Dec-21 5.66
Jan-22 6.01
Feb-22 6.07
Mar-22 6.95
Apr-22 7.79
May-22 7.04
Jun-22 7.01
Jul-22 6.71
Aug-22 7
Sep-22 7.41
Oct-22 6.77

It looks like inflationary pressures are rising, which is not a good sign. The Indian government and the Reserve Bank of India (RBI) don't seem to be able to control inflation based on how the currency is doing.

5. Unemployment rate and Job Availability

Currency is affected by the number of jobs and the unemployment rate, but not in a direct way. There are more jobs, and more people have jobs, so the economy is improving. Canada's unemployment rate dropped from 5.1% in May 2022 to 4.9% in June 2022. But in August 2022, the rates went up to 5.4%. Even though it went down by 0.2% from September to October, people still need to find better jobs. It means that more people are finding work. There have been a lot of job openings since February 2022. But it has been going down for a while now. Domestic investment and inflation will decrease when more people have jobs and money to spend. People save money, and things get better.

Canada: Unemployment Rate
Date Rate (%)
Jan-22 6.5
Feb-22 5.5
Mar-22 5.3
Apr-22 5.2
May-22 5.1
Jun-22 4.9
Jul-22 4.9
Aug-22 5.4
Sep-22 5.2
Oct-22 5.2

On the other hand, India's unemployment rate has risen from 6.8% in July 2022 to 8.2% in August 2022. Still, the unemployment rate dropped significantly when it dropped to 6.4% in September 2022. But in October 2022, it will be 7.7%. People are less able to buy things because they are afraid and don't know what will happen. It means that less money is being put into the country. Several international companies in India have removed restrictions on hiring, which may be why the unemployment rate is so low.

India: Unemployment Rate
Date Rate (%)
Nov-21 6.97
Dec-21 7.91
Jan-22 6.56
Feb-22 8.11
Mar-22 7.57
Apr-22 7.83
May-22 7.12
Jun-22 7.8
Jul-22 6.8
Aug-22 8.2
Sep-22 6.4
Oct-22 7.7

6. Budget deficit and national debt levels

Almost every country has debts. Even though these are fair responsibilities, more debt leads to inflation, which decreases the currency's value. In the same way, the government proposes its budget for the next fiscal year when actual spending goes over budget and inflation goes up, which makes money less valuable.

Canada spent $3.91 billion less than it had planned in the first quarter. In the first quarter of 2022, their foreign debt was $ 2.49 billion, down from $ 2.59 billion in the fourth quarter of 2021. The Canadian dollar is now worth more because of this. The graph below shows that Canada sells more than it usually buys. In December 2021, imports went over exports for the first time. The country has kept a positive delta through 2022. In July, the difference was CAD 2,372.7M, and in August 2022, it was CAD 1,519M. In this way, how well Canada does shows how strong the Canadian dollar is.

Canada: Balance of Trade
Date CAD $ Millions
Sep-21 731.60
Oct-21 1655.60
Nov-21 2236.90
Dec-21 -1448.10
Jan-22 3336.30
Feb-22 2836.80
Mar-22 2006.90
Apr-22 1941.50
May-22 4768.90
Jun-22 5046.30
Jul-22 2372.70
Aug-22 1519.00

On the other hand, India's union budget is always made public in February. India spent USD 13.4 billion more than planned in the first three months of 2022. At the end of the first quarter of 2022, India owed other countries USD 620 billion. After the fourth quarter of 2021, when its value was USD 614 billion, it went up. It has worsened the country's inflation and hurt the rupee's value.

The trade balance is something else to think about. India has never made more money than it spent on goods. In July and August of 2022, India had a negative delta that was very large. It was worth 19.33 CAD M less in September 2022 than it had been.

India: Balance of Trade
Date CAD$ Millions
Sep-21 12.19
Oct-21 11.12
Nov-21 10.19
Dec-21 14.06
Jan-22 11.32
Feb-22 11.24
Mar-22 15.66
Apr-22 11.53
May-22 11.35
Jun-22 12.85
Jul-22 41.47
Aug-22 38.68
Sep-22 19.33

7. Politics and international policies

How stable a country's government also affects its money. If the government is less stable, there will be more rallies and protests against it, less foreign investment, and the currency's value will go down. People in India have recently been very harsh on their government for many different reasons, such as religion, taxes, the instability of political parties, etc. Only a few parts of the country are doing well because of this. The Indian rupee has lost value because its growth has been all over the place.

Both Canada and India have been called a lot of bad names. Both currencies have lost value because of this. On the other hand, the US dollar and the Indian rupee have done worse than Canada.

Since neither currency has been stable, neither has done well so far. The Canadian dollar, on the other hand, has done much better than the Indian rupee. The US dollar could have done better than both coins. Most other currencies have done much worse than the Canadian dollar. Even though both governments try to keep their currencies strong, things sometimes go differently than planned. The rupee's value is likely to drop even more before it starts going up again at the beginning of the following year.