Why is the CAD to INR Exchange Rate Down today on 15th March 2023 (1st half of March 2023)?

Key points:

• The exchange rate from CAD to INR is going down.
• The Bank of Canada raised interest rates.
• The Reserve Bank of India has increased the interest rates to 6.5% and is expected to raise interest rates by 25 bps in February 2023.
• Inflation and Unemployment rates are up in India and Canada.

The Canadian dollar has become five times more valuable in the past few years than the Indian rupee. As of March 15, 2023, one Canadian dollar is worth 60 Indian rupees. The index reached a record high of 60.67 on March 1, 2023. But on March 13, 2023, it hit a new record low of 58.38. One Canadian dollar can now buy about 61.57 Indian rupees. The trend curve has been volatile in the last two weeks, with a standard deviation of 0.33 rupees. The Canadian dollar has gotten stronger over the past few months, as shown by changes in exchange rates. At least sixty Indian rupees must be paid (INR). At first, this item could be bought for between 50 and 55 rupees. It used to be $50, but now it's $60. The currency may be overvalued, there may be an imbalance in foreign capital, gas prices may increase, and demand may increase.

CAD to INR Exchange Rates (1 CAD into INR)
Date	Open	High	Low	Close
Mar 01, 2023	60.51	60.67	60.37	60.51
Mar 02, 2023	60.59	60.66	60.46	60.59
Mar 03, 2023	60.52	60.60	59.90	60.52
Mar 06, 2023	59.41	60.20	59.41	60.03
Mar 07, 2023	60.03	60.13	59.53	60.04
Mar 08, 2023	59.60	59.72	59.32	59.59
Mar 09, 2023	59.33	59.61	59.19	59.34
Mar 10, 2023	59.25	59.50	59.13	59.24
Mar 13, 2023	58.38	60.01	58.38	59.23
Mar 14, 2023	59.81	60.26	59.78	59.82
Mar 15, 2023	60.09	60.27	60.08	60.22

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 has a lot of people living there. This source meets about 80% of India's crude oil needs yearly. Changes in the price of crude oil are a good indicator of how well the world economy is doing. The price went as high as CAD 110.21 on March 7, 2023. It was only 97.89 Canadian dollars on March 15, 2023. Finding hope in the passage is possible, but how it flows makes it less sure.

If the price of crude oil went down, making, shipping, and selling it would be easier and cheaper. The Indian government should stop making so many new rupees if it wants the value to increase.

Crude Oil (in CAD)
Date	High (CAD)	Low (CAD)	Close (CAD)
01-Mar-23	106.23	103.87	106.01
02-Mar-23	106.80	104.96	106.22
03-Mar-23	108.62	103.09	108.32
06-Mar-23	109.68	106.54	109.45
07-Mar-23	110.21	104.92	105.63
08-Mar-23	106.86	104.64	105.39
09-Mar-23	107.71	104.09	104.49
10-Mar-23	106.65	103.41	106.06
13-Mar-23	106.63	99.51	102.95
14-Mar-23	102.88	97.22	97.97
15-Mar-23	99.15	97.89	99.12

The good is so essential that even Canada relies on it a lot. Most of the time, when crude oil is sold, it makes more money than it costs to make. They will make even more money by 2022. Bringing in crude oil costs $1,754,000.00 in the second quarter of 2022. Most of the time, it's between $1 billion and $1.5 billion, a lot of money compared to what they made when they first started. If imported crude oil prices increase, the Canadian dollar may get stronger.

The value of the Indian rupee against the Canadian and US dollars will continue to fall, though.

2. Commodity Prices and Import/Export

Both Canada and India have bought things from other countries in the past. There are also things like metal ores, plastics, rubber, chemicals, and fuels. The factors above significantly affect the exchange rate between the Canadian dollar and the Indian rupee. The value of a country's currency is linked to how strong its economy is.

Canada spent $9.702 trillion on energy-related products in August 2022.2. Plastics and rubber are worth $1046 million in Canada; chemicals are worth $153 million; metal ores and concentrates are $100 million; and finished petroleum products are $4179 million. That same month, Canada made 638,644,000,000,000 CAD and spent 653,833,000,000,000 CAD—the difference between what Canada exports and imports make the Canadian dollar stronger than the US dollar. Since June 2022, when they were 32.4%, prices have decreased monthly. In August 2022, they were 17.6%, and in January 2023, they were 1.2%.

Canada: Commodity Prices
Date	% change YOY
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	12.7
Oct-22	8.1
Nov-22	8.1
Dec-22	8.1
Jan-23	1.2

India sent goods to Canada worth C$81.91 billion—only $45.02 billion worth of Indian goods was sent to Canada. India imports much more than it sells. When the rupee falls, prices go up, and inflation happens.

India: Commodity Prices
Date	Base Points change YOY)
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
Nov-22	176.5
Dec-22	175.7
Jan-23	176.5

If there is inflation, prices have to change. From August 2022 to January 2023, the cost of goods increased by 174.3 percentage points. (176.5 points on the scale). The Indian rupee is much weaker than the US and Canadian dollar.

3. Interest rates

Most Canadians think prices will continue to rise. They also believe that getting the economy going again will put more pressure on the budget. In 2022, the world economy was expected to grow by 3.5%, in 2023 by 2%, and in 2024 by 3%. The Bank of Canada has done the following to help Canadians overcome the current economic storm.

Consider that the interest rate just went up by 100 basis points. The central bank thinks that if inflation rates increase, people, businesses, and consumers will all be better off in the long run. They believe that it will peak at just 2% in 2024. Interest rates will increase greatly in March 2023 because inflation is going up. The rate went up 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

Because of this, the Reserve Bank of India did the same thing. 50 basis points raised rates by the Reserve Bank of India, India's central bank. The interest rate was 5.4% in July and August of 2018. In July, it was 4.9%, and in August 2022, it was still 4.9%. In the end, in December 2022, interest rates would reach 6.5%. 2. The Indian government wants inflation to be less than or equal to 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

The government and the private sector have made it harder to get money by putting up more barriers to financial independence. When inflation and expectations of inflation change, interest rates change right away. People have less money to spend when the cost of living goes up.

4. Inflation rates

The inflation rate indicates how much money can buy and how long it will last. People have less money to spend when the cost of living goes up. Inflation is a problem for almost every economy right now. Some countries will be hit very hard, while others won't be affected at all.

The rate of inflation in Canada has also gone up a lot. In just one year, the prices went up by 5%. Canada did not get left out of the worldwide coronavirus pandemic. As inflation rates went up, it was clear that rules from the government were stopping factories from growing. After the Bank of Canada raised repo rates in June 2022 to fight inflation, Canadian consumer prices dropped from 8.1% in June 2022 to 7.6% in July 2022 and 5.9% in January 2023. Since inflation has been going down, Canada's economy has been doing very well.

Canada: Inflation Rates
Date	Rate (%)
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
Nov-22	6.8
Dec-22	6.3
Jan-23	5.9

Since September 2021, the cost of living in India has increased steadily. Even though growth and prices stopped going up at the beginning of 2022, March, April, and May saw big jumps. After going up steadily from July to September 2023, the inflation rate hit its highest point of 6.44% in February 2023.

India: Inflation Rates
Date	Rate (%)
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	7.00
Sep-22	7.41
Oct-22	6.77
Nov-22	5.88
Dec-22	5.72
Jan-23	6.52
Feb-23	6.44

A feeling of inflationary pressure that is getting worse is a problem. The Reserve Bank of India (RBI) and the government of India have no choice but to raise prices because the Indian rupee is in such bad shape.

5. Unemployment rate and Job Availability

The number of people who don't and those who do have jobs affects the value of a country's currency. When more people go to work, and more businesses hire people, the economy gets better. In May 2022, 5.1% of Canadians were out of work. It was 4.9% in June 2022. The rate will increase from 4% to 5.4% in August 2022. Even though the unemployment rate went from 0.2% to 0.1% between October and December, there still need to be more job openings. It is ready to be used in the job market today. There have been a lot of brand-new job openings since February 2022. Things have been getting worse, though. As more people join, the number of people working and their ability to buy things increases. At the same time, domestic investment and inflation go down. Because more people are willing to save money, the economy has gotten better.

Canada: Unemployment Rate
Date	Rate (%)
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
Nov-22	5.1
Dec-22	5
Jan-23	5

In India, the unemployment rate went from 6.8% in July 2022 to 8.2% in August of the same year. Even so, experts are sure that by September 2022, when the unemployment rate will be 6.4%, it will have gone down significantly. On the other hand, it was 7.1% in January 2023. Because people are worried about the economy, they spend less money. This trend shows that less money is coming from outside the country. India has a low unemployment rate because some multinational companies have made it easier to hire people.

India: Unemployment Rate
Date	Rate (%)
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
Nov-22	8
Dec-22	8.3
Jan-23	7.1

6. Budget deficit and national debt levels

Except for a few, no country in the world has any debt. There's no doubt that these costs are high, but when debt levels go up, inflation and a drop in the currency's value happen. The government makes a budget for the next fiscal year when actual spending exceeds planned, and inflation makes money worth less.

Canada spent $3.91 billion less than it had planned in the first three months of this year. Between Q4 2021 and Q1 2022, their external debt went from $2.59 billion to $2.49 billion, a $59 million drop. The Canadian dollar is now worth more because of this. The graph below shows that Canada's exports have grown faster than imports. In December 2021, the things that were brought in and sent out were the same. The country will have a positive delta until 2022. In July, the difference was CAD 2,372.7M, and CAD 40M was due in November 2022. How well the Canadian dollar has done can be seen in how well the Canadian economy is doing.

Canada: Balance of Trade
Date	CAD $ Millions
Feb-22	2836.8
Mar-22	2006.9
Apr-22	1941.5
May-22	4768.9
Jun-22	5046.3
Jul-22	2372.7
Aug-22	-2535
Sep-22	8675
Oct-22	4987
Nov-22	-2187
Dec-22	-1595

On the other hand, India's national budget is always released in February. In the first three months of 2022, India spent more money than it had. By the end of the first quarter of 2022, India had an external debt of USD 620 billion. By 2021's close, it will be worth $614 billion. Because of this, the rupee has lost value, and inflation has increased.

It is also suggested that the trade deficit be taken into account. India has had a trade deficit for as long as it has been a country (income minus expenditures). A big negative delta hit India in July and August of 2022. Canada's trade deficit in January 2023 was C$23.4 million.

India: Balance of Trade
Date	CAD$ Millions
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
Oct-22	20.7
Nov-22	15.3
Dec-22	31.8
Jan-23	23.4

7. Politics and international policies

The value of a country's currency can be used to measure how stable its government is. People are less likely to protest when they don't trust their government, and the value of their currency goes down. Indians are becoming more critical of their government for several reasons, such as the country's many different religions, high taxes, and the instability of its political parties. Because of this, some parts of the country do well, and some need to do better. The rupee's value has decreased because India's economy is growing at an unstable rate.

Canada and India have gotten a lot of bad press from the media. Both currencies have lost value because of this. The Canadian dollar has done better than both the Indian rupee and the US rupee.

Both currencies have done well, even though they are very unstable. The Canadian dollar has been strong, while the Indian rupee has been weak. In the US, these two coins are not worth the same as a dollar. Compared to other currencies, the Canadian dollar has done well. Both governments would be better off if their currencies were stable, but even the best-laid plans can go wrong if something unexpected happens. The value of the rupee is expected to stay the same until the end of the year.