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

Key points:

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

The exchange rate between Canadian dollars and Indian rupees has increased steadily in the last five years. As of November 15, 2022, one Canadian dollar is worth 60.72 Indian rupees. On November 15, 2022, the price reached a high of 61.23. Still, 59.27 was the lowest on November 07, 2022. On average, one Canadian dollar is worth 60.47 Indian rupees. The graph below shows that the trend curve has been all over the place in the last two weeks, with a standard deviation of 0.135 rupees. Changes in exchange rates show that the Canadian dollar has returned some of its value. The money will be worth more than 60 rupees. It now costs 60 rupees for something that used to cost between 50 and 55 rupees. Possible causes include a strong currency, a trade and foreign capital imbalance, and higher gas prices.

CAD to INR Exchange Rates (1 CAD into INR)
Date	Open	High	Low	Close
Nov 01, 2022	60.75	61.00	60.45	60.73
Nov 02, 2022	60.64	60.85	60.55	60.63
Nov 03, 2022	60.26	60.50	60.01	60.26
Nov 04, 2022	60.09	60.84	60.09	60.10
Nov 07, 2022	60.78	60.88	60.50	59.27
Nov 08, 2022	60.58	60.66	60.27	60.58
Nov 09, 2022	60.58	60.66	60.20	60.59
Nov 10, 2022	60.07	60.75	60.07	60.09
Nov 11, 2022	60.43	60.83	60.31	60.43
Nov 14, 2022	60.00	61.17	60.00	60.30
Nov 15, 2022	60.73	61.23	60.60	60.72

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 one of the countries with the most people. More than 80% of the crude oil India needs comes from other countries. The economy of the world has changed a lot. The price of crude oil also shows this. The price went up to CAD 127.37 on November 03, 2022. Since November 03, 2022, prices have gone up and down, as shown by the trend line. On November 15, 2022, prices fell to CAD 112.01. Even though it could be seen as a good thing, the fact that it changes shows that it's not.

If the price of something goes down, it may be easier and cheaper to make, ship, and sell the item. It might decrease inflation, raising the value of the Indian rupee. But it hasn't happened. Some other things also hurt the rupee.

Crude Oil (in CAD)
Date	High (CAD)	Low (CAD)	Close (CAD)
November 01, 2022	122.99	119.40	122.50
November 02, 2022	122.11	119.29	120.07
November 03, 2022	127.37	120.45	127.01
November 07, 2022	126.67	122.16	124.04
November 08, 2022	124.36	119.44	119.97
November 09, 2022	119.72	114.70	115.14
November 10, 2022	118.16	114.57	116.97
November 11, 2022	120.12	114.90	118.60
November 14, 2022	119.07	112.86	113.81
November 15, 2022	118.17	112.01	115.82

Canada depends a lot on crude oil as well. They sell more crude oil than they bring in most of the time. But in 2022, their imports are likely to skyrocket. They brought in crude oil worth CAD 1,754,000,00 in the second quarter of 2022. It is much more than what they made initially, usually between $1 billion and $1.5 billion. Since the price of imported crude oil is rising, the Canadian dollar may do well against the US dollar.

On the other hand, the difference between how the Indian and Canadian dollar did against the US dollar suggests that the rupee's value against the CAD may continue to fall.

2. Commodity Prices and Import/Export

Canada and India have both bought goods from other countries. These goods include metal ores and minerals, refined petroleum products, plastic and rubber goods, chemicals, energy products, and more. Because the overall trade deficit affects how the currency does against the US dollar, the above factors significantly affect the CAD-INR exchange rate.

In August 2022, Canada bought energy products worth 9702 million Canadian dollars, plastic and rubber products worth 1046 million Canadian dollars, chemicals worth 1553 million Canadian dollars, metal ores and concentrates worth 1007 million Canadian dollars, and refined petroleum products worth 4179 million Canadian dollars. Canada brought in a total of 63864,000,000 CAD and sent out a total of 65383,000,000 CAD in August 2022. The fact that the Canadian dollar is strong against the US dollar shows that there is a positive difference between exports and imports. Aside from that, prices have decreased from 32.4% in June 2022 to 17.6% in August 2022 and 11% in September 2022.

Canada: Commodity Prices
Date	% change YOY
Oct-21	38.6
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

The same kinds of goods came from India. All of India's imports to Canada were 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

Because of inflation, prices of goods change. The prices of goods have gone up a lot, from 174.3 basis points in August 2022 to 176.7 basis points in October 2022. It shows that the Indian currency isn't doing well against the US and Canadian dollars.

3. Interest rates

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

When interest rates went up by 100 basis points is one example. The bank thinks this will help consumers, businesses, and people when the more significant effects of rising inflation rates are taken into account. They want inflation to be 2% or less by 2024. As inflation rates go up, starting in March 2022, interest rates will go up sharply. The rate went from 2.5% in June and August 2022 to 3.75% in October 2022, an increase of 0.75 percentage points.

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

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. Experts think that 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

It makes it harder for people to get money from the government or private institutions. The value of a currency is directly affected by inflation, which is directly affected by interest rates. When prices go up, money is worth less.

4. Inflation rates

The inflation rate shows how the currency is doing and how much it's 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 rate of inflation 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. Because the government had strict rules, factories couldn't grow, which was terrible. It is shown by the fact that 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, India's prices 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 has gone down to 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 way the currency is doing shows that the RBI and the Indian government don't seem to be able to keep inflation under control.

5. Unemployment rate and Job Availability

The unemployment rate and the number of jobs available affect the currency, but not in a direct way. More jobs and more people are working, so the economy is improving. Canada's unemployment rate dropped from 5.1% in May 2022 to 4.9% in June 2022. In August 2022, though, the rates went up to 5.4%. Even though it decreased by 0.2% between September and October, it still needs to be more accessible for people to find jobs. It means that more people are finding work. Since February 2022, a lot of jobs have been open. But it has been going down lately. When more people get jobs and have more money to spend, there will be a less domestic investment and inflation. Things get better, and money is saved.

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 in September 2022, when it dropped to 6.4%. But in October 2022, it has gone up to 7.7%. People are less able to buy things because of uncertainty and fear, which has led to less investment in 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 lowers the currency's value. In the same way, the government proposes its budget for the next fiscal year when actual spending goes over the budget and inflation goes up, which makes money worth less.

Canada spent USD 3.91 billion less than it had planned in the first quarter. Also, their foreign debt went down from $USD 2.59 billion in the fourth quarter of 2021 to $ 2.49 billion in the first quarter of 2022. The Canadian dollar is now worth more because of this. The graph below shows that most of the time, Canada exports more than it imports. Only in December 2021 did imports go over exports. 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, Canada's performance 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 released in February of each year. India spent USD 13.4 billion more than planned in the first quarter of 2022. At the end of the first quarter of 2022, India owed USD 620 billion to other countries. From the fourth quarter of 2021, when it was USD 614 billion, it went up. It has worsened inflation in the country, which has hurt the value of the rupee. The trade balance is another thing to think about. India has always bought more stuff than it sold. In July and August of 2022, India had a vast negative delta. By September 2022, it had dropped to a negative delta of 19.33 CAD M.

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

The value of a country's money is also affected by its government's stability. If the government is less stable, there will be more protests and rallies against it, less foreign investment, and the currency will be worth less. 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.

People have said a lot of bad things about both Canada and India. Both currencies have lost value because of this. On the other hand, the US dollar and the Indian rupee have done worse than Canada.

Both currencies have yet to do well because they have been unstable. The Canadian dollar, on the other hand, has done much better than the Indian rupee. Compared to the US dollar, both coins could have done better. Most other currencies have done much worse than the Canadian dollar. Even though both governments work to support their currencies, problems arise when things go differently than planned. The rupee's value is likely to drop even more before it starts to go up again at the beginning of the following year.