Why is the CAD to INR Exchange Rate Up today on 31st March 2023 (2nd half of March 2023)?

Key points:

• The exchange rate from CAD to INR is rising.
• 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.

In recent years, the Canadian dollar has become five times more valuable than the Indian rupee. One Canadian dollar is worth 60 Indian rupees as of March 15, 2023. On March 31, 2023, the index reached a new high of 60.68. However, on March 20, 2023, it fell to a new low of 59.27. One Canadian dollar now buys approximately 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 strengthened in recent months, as evidenced by changes in exchange rates. A minimum of sixty Indian rupees must be paid (INR). Initially, this item could be purchased for between 50 and 55 rupees. It used to be $50, but it's now $60. The currency may be overvalued; there may be a foreign capital imbalance, and gas prices and demand may rise.

CAD to INR Exchange Rates (1 CAD into INR)
Date	Open	High	Low	Close
Mar 16, 2023	60.17	60.28	59.98	60.17
Mar 17, 2023	60.17	60.29	59.96	60.17
Mar 20, 2023	59.27	60.41	59.27	60.07
Mar 21, 2023	60.30	60.50	60.14	60.31
Mar 22, 2023	60.25	60.31	60.13	60.25
Mar 23, 2023	60.10	60.26	60.01	60.11
Mar 24, 2023	59.91	59.94	59.66	59.89
Mar 27, 2023	59.89	60.07	59.88	59.87
Mar 28, 2023	60.14	60.30	59.98	60.14
Mar 29, 2023	60.41	60.58	60.38	60.39
Mar 30, 2023	60.54	60.67	60.52	60.55
Mar 31, 2023	60.682	60.777	60.569	60.64

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

There are a lot of people in India. This source meets roughly 80% of India's crude oil requirements yearly. Changes in crude oil prices are a good indicator of how well the global economy is doing. On March 31, 2023, the price reached CAD 101.50. On March 20, 2023, it was only 87.91 Canadian dollars. It is possible to find hope in the passage, but how it flows makes it less specific.

Making, shipping, and selling crude oil would be easier and less expensive if the price of crude oil fell. If the Indian government wants the rupee's value to rise, it should stop printing so many new ones

Crude Oil (in CAD)
Date	High (CAD)	Low (CAD)	Close (CAD)
Mar 16, 2023	95.50	90.45	94.08
Mar 17, 2023	95.54	89.41	91.56
Mar 20, 2023	92.82	87.91	92.73
Mar 21, 2023	95.15	91.28	94.78
Mar 22, 2023	97.76	94.44	97.20
Mar 23, 2023	98.31	94.84	95.96
Mar 24, 2023	96.54	91.66	95.00
Mar 27, 2023	100.34	94.89	99.95
Mar 28, 2023	100.94	98.57	99.95
Mar 29, 2023	101.09	98.90	99.19
Mar 30, 2023	101.22	98.48	100.87
Mar 31, 2023	101.50	99.74	101.30

The good is so essential that even Canada relies heavily on it. When sold, crude oil usually makes more money than it costs to produce. They will be even more decadent by 2022. In the second quarter of 2022, crude oil costs $1,754,000.00. It's usually between $1 billion and $1.5 billion, a lot of money compared to what they made when they started. If imported crude oil prices rise, the Canadian dollar may strengthen.

However, the Indian rupee's value against the Canadian and US dollars will continue to fall.

2. Commodity Prices and Import/Export

Canada and India have both purchased goods from other countries in the past. Examples are metal ores, plastics, rubber, chemicals, and fuels. The factors above significantly impact the exchange rate between the Canadian dollar and the Indian rupee. A country's currency's value is related to its economy's strength.

In August 2022, Canada spent $9.702 trillion on energy-related products. In Canada, the value of plastics and rubber is $1046 million, chemicals are $153 million, metal ores and concentrates are $100 million, and finished petroleum products are $4179 million. During the same month, Canada earned 638,644,000,000,000 CAD and spent 653,833,000,000,000 CAD—the difference between what Canada exports and imports strengthened the Canadian dollar against the US dollar. Prices had decreased monthly since June 2022, when they were 32.4%. They were 17.6% in August 2022 and 1.2% in January 2023.

Canada: Commodity Prices
Date	% change YOY
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
Feb-23	-5.2

India sent C$81.91 billion in goods to Canada, while only $45.02 billion in Indian goods were sent to Canada. India imports far more than it exports. When the rupee falls in value, prices rise, and inflation occurs.

India: Commodity Prices
Date	Base Points change YOY)
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
Feb-23	176.8

Prices must change if there is inflation. The cost of goods increased by 174.3 percentage points between August 2022 and January 2023. (176.5 on a scale of 100). The Indian rupee is significantly weaker than the US and Canadian currencies.

3. Interest rates

The majority of Canadians believe that prices will continue to rise. They also think reviving the economy will strain the budget more. The global economy was expected to grow by 3.5% in 2022, 2% in 2023, and 3% in 2024. The Bank of Canada has taken the following steps to assist Canadians in weathering the current economic storm.

Consider that the interest rate has recently increased by 100 basis points. The central bank believes rising inflation rates will benefit people, businesses, and consumers in the long run. They predict that it will peak at 2% in 2024. Because of rising inflation, interest rates will skyrocket in March 2023. From 2.5% in June and August 2022 to 4.25% in November 2022, the rate increased by 0.75 percentage points.

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

As a result, the Reserve Bank of India followed suit. The Reserve Bank of India, India's central bank, raised interest rates by 50 basis points. In July and August of this year, the interest rate was 5.4%. It was 4.9% in July and will remain so in August 2022. In the end, interest rates would reach 6.5% in December 2022. 2. By 2024, the Indian government wants inflation to be less than or equal to 3%.

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 private sector have made it more challenging to obtain funds by erecting more barriers to financial independence. Interest rates immediately change when inflation and inflation expectations change. When the cost of living rises, people have less money to spend.

4. Inflation rates

The inflation rate determines how much money can be purchased and how long it will last. When the cost of living rises, people have less money to spend. Inflation is currently a problem in almost every economy. Some countries will be severely impacted, while others will be unaffected.

In Canada, the rate of inflation has also risen significantly. Prices increased by 5% in just one year. Canada was not left out of the global coronavirus pandemic. As inflation rates rose, it became clear that government regulations were preventing factories from expanding. Canadian consumer prices fell from 8.1% in June 2022 to 7.6% in July 2022 and 5.2% in February 2023 after the Bank of Canada raised repo rates to combat inflation in June 2022. Canada's economy has performed admirably since inflation has declined.

Canada: Inflation Rates
Date	Rate (%)
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
Feb-23	5.2

Since September 2021, the cost of living in India has steadily increased. Even though growth and prices stopped rising in early 2022, there were significant increases in March, April, and May. After steadily rising from July to September 2023, the inflation rate peaked at 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 sense of increasing inflationary pressure is a problem. Because the Indian rupee is in such bad shape, the Reserve Bank of India (RBI) and the government of India have no choice but to raise prices.

5. Unemployment rate and Job Availability

The number of people who do not work and those who do work influences the value of a country's currency. The economy improves when more people go to work, and more businesses hire. In May 2022, 5.1% of Canadians were unemployed. In June 2022, it was 4.9%. In August 2022, the rate will rise from 4% to 5.4%. Even though the unemployment rate fell from 0.2% to 0.1% between October and December, more job openings are still required. It is now ready for use in the job market. Since February 2022, there have been numerous new job openings. However, things have gotten worse. As more people join, the number of people working and purchasing power grows. Domestic investment and inflation both fall at the same time. The economy has improved as more people are willing to save money.

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

The unemployment rate in India increased from 6.8% in July 2022 to 8.2% in August of the same year. Nonetheless, experts believe that by September 2022, when the unemployment rate will be 6.4%, it will have significantly decreased. In January 2023, however, it was 7.1%. People spend less money because they are concerned about the economy. This trend indicates that less money comes into the country from outside sources. Because some multinational corporations have made it easier to hire people, India has a low unemployment rate.

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 countries, no country is in debt. These costs are undeniably high, but as debt levels rise, so does inflation and the currency's value. When actual spending exceeds planned levels, and money becomes less valuable due to inflation, the government creates a budget for the following fiscal year.

Canada spent $3.91 billion less than it had planned in the first three months of this year. Their external debt fell by $59 million between Q4 2021 and Q1 2022, from $2.59 billion to $2.49 billion. As a result, the Canadian dollar is now worth more. The graph below shows that exports in Canada have grown faster than imports. The items brought in and sent out in December 2021 were the same. Until 2022, the country will have a positive delta. The difference was CAD 2,372.7M in July, and CAD 40M was due in November 2022. The strength of the Canadian dollar can be seen in the power of the Canadian economy.

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

The Indian national budget, on the other hand, is always released in February. India spent more money in the first three months of 2022 than it had previously. India's external debt stood at USD 620 billion at the end of the first quarter of 2022. It will be worth $614 billion by the end of 2021. As a result, the rupee has lost value, and inflation has risen.

It is also suggested that the trade deficit be considered. For as long as India has been a country, it has had a trade deficit (income minus expenditures). In July and August of 2022, India will be hit by a sizeable negative delta. In January 2023, Canada's trade deficit 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 assess the stability of its government. When people lose trust in their government and the importance of their currency falls, they are less likely to protest. Indians are becoming more critical of their government for various reasons, including the country's many different religions, high taxes, and political party instability. As a result, some parts of the country perform well while others need to improve. The rupee's value has fallen because India's economy is growing at an indeterminate rate.

The media has given Canada and India a lot of bad press. As a result, both currencies have lost value. The Canadian dollar has outperformed both the Indian rupee and the US dollar.

Despite their high volatility, both currencies have performed well. The Canadian dollar has risen in value, while the Indian rupee has fallen. These two coins are not worth the same as a dollar in the United States. The Canadian dollar has performed well in comparison to other currencies. Both governments would benefit from stable currencies, but even the best-laid plans can only go right if something unexpected occurs. The rupee's value is expected to remain stable until the end of the year.