Why is the CAD to INR Exchange Rate Up today on 30th May 2023 (2nd half of May 2023)?

Key points:

• Canada Dollar to Indian Rupee Exchange Rate decreases.
• Interest rates in Canada have been increased.
• In 2023, interest rates in India are projected to increase by another 25 basis points (bps) from their current level of 6.5 percent.
• Inflation and unemployment rates have recently risen in both India and Canada.

As of April 30, 2023, one Canadian dollar equals sixty Indian rupees, thanks to years of steady value growth. Between May 23 and May 29, 2023, the value of one currency relative to another saw wild swings, reaching a high of 61.39 and a low of 60.09. The standard deviation of the trend curve is 0.135 rupees. Recent shifts in the exchange rate have boosted the value of the Canadian dollar. It used to cost 5055 rupees, but now it only costs 60. Overvaluation may result from trade deficits or price and demand spikes for petrol.

CAD to INR Exchange Rates (1 CAD into INR)
Date	Open	High	Low	Close
May 16, 2023	61.033	61.2675	60.913	61.0316
May 17, 2023	61.0164	61.1946	60.8323	61.0044
May 18, 2023	61.1419	61.3718	61.0943	61.1679
May 19, 2023	61.2377	61.3804	61.1655	61.2349
May 22, 2023	60.4331	61.3384	60.4331	61.3662
May 23, 2023	61.2848	61.3902	61.0628	61.282
May 24, 2023	61.3023	61.3618	60.7363	61.2996
May 25, 2023	60.7789	60.8476	60.5972	60.7822
May 26, 2023	60.5787	60.6939	60.4723	60.5787
May 29, 2023	60.0932	60.7694	60.0932	60.0932
May 30, 2023	60.6812	60.907	60.6688	60.6704
May 31, 2023	60.7406	60.8801	60.51	60.7518

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

Due to the country's massive population, this single provider can meet about 80% of India's annual demand for crude oil. The price of crude oil is a good indicator of the state of the international economy. The price was 100.06 CAD on May 19 and dropped to 90.85 CAD on May 31, 2023. There is room for improvement in the overall structure of the passage, but it shows promise. Every aspect of the crude oil industry would benefit from lower prices, from extraction to distribution to retail. The Indian government could increase the value of the rupee by limiting the printing of new notes.

Crude Oil (in CAD)
Date	High (CAD)	Low (CAD)	Close (CAD)
May 16, 2023	97.34	95.52	96.08
May 17, 2023	99.28	94.92	98.70
May 18, 2023	99.25	97.27	97.87
May 19, 2023	100.06	96.83	97.54
May 22, 2023	97.85	95.40	97.35
May 23, 2023	98.73	95.95	97.55
May 24, 2023	99.93	97.79	99.41
May 25, 2023	99.47	94.94	96.07
May 26, 2023	97.68	95.60	97.17
May 30, 2023	99.24	93.13	93.72
May 31, 2023	94.46	90.85	92.29

This item is highly valued in Canada, as in many other countries. Selling crude oil typically yields a higher return than its production price. The market is projected to grow even more fruitful by 2022. The second quarter of 2022 saw a spike in the price of crude oil to $1,754,000 per barrel. It significantly increases compared to the average first-year output of $1–$1.5 billion. An increase in the price of imported crude oil could boost the value of the Canadian dollar.

However, the value of the Indian rupee will continue to decline in the Canadian and US dollars.

2. Commodity Prices and Import/Export

Remember that the value of one currency against another is heavily influenced by consumer preferences in both countries, in this case, the Canadian dollar against the Indian rupee. The relative economic power of the two countries informed this exchange rate. The two nations, for example, have long relied on imports of various materials and components.

In August 2022, the Canadian energy market was valued at $9.702 trillion. Chemicals were worth $153,000,000, plastics and rubber were $10,460,000,000.0, metal ores and concentrates were $100,000,000.0, and petroleum products accounted for $4,179,000,000. That month, the value of Canadian exports was 638,644,000,000,000 CAD, while the value of Canadian imports was 653,833,000,000,000 CAD. The large surplus in exports over imports bolstered the Canadian dollar. In addition, since June 2022, prices for consumer goods have fallen every month, falling by a total of 32.4% (in June), 17.6% (in August), and 1.2% (in January 2023).

Canada: Commodity Prices
Date	% change YOY
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
Mar-23	-16.5
Apr-23	-10.8

Canada had an $81.91 billion trade deficit with India in 2017, meaning that its imports from India were higher than its exports to the country by $45.02 billion. Since India imports a large number of goods, the depreciation of the rupee could lead to higher prices.

India: Commodity Prices
Date	Base Points change YOY)
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
Mar-23	177.2
Apr-23	178.1

The CPI for goods increased by 178.1 percentage points, or 176.5 percent, between August 2022 and April 2023. The value of the Indian rupee is significantly lower than that of the Canadian and American dollar.

3. Interest rates

The majority of Canadians are concerned that revitalization efforts will drain their wallets. Forecasts call for global GDP expansion of 3.5% in 2022, 2.5% in 2023, and 3% in 2024. The Bank of Canada has taken several steps to ease the current economic crisis in Canada.

The central bank recently increased the interest rate by 100 basis points, assuming that higher inflation will benefit the economy, businesses, and consumers in the long run. The central bank projects that inflation will drop to 2% by 2024. Interest rates have increased by over 100% from their low point in June and August of 2022 (2.5%) to their current level in January of 2023 (4.5%) due to the inflation crisis.

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

The inflation rate in India has prompted the Reserve Bank of India to raise interest rates. There was a rate hike of 50 basis points in July and August of this year, bringing the annual percentage rate up to 5.4%. The July interest rate of 4.9% will be extended through August 2022. By the decade's end, the Federal Reserve anticipates raising interest rates to 6.5%. By 2024, the Indian government hopes to have inflation down to 3% at the very most.

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

Due to increased government and private sector regulation and scrutiny, securing financial backing is now more difficult. Interest rates are sensitive to various economic indicators, including inflation and expectations. Consumers have less disposable income to spend as the cost of living rises.

4. Inflation rates

Because of its effect on spending habits and currency value, inflation is a severe problem for all economies. When costs increase, people have less discretionary income. Inflation can significantly impact some nations more than others, but nobody is safe.

Canada has one of the highest annual inflation rates in the world, at 5%. Despite Canada's stringent regulatory environment, the COVID-19 pandemic hit the country hard. After the Bank of Canada increased repo rates in June 2022 to fight inflation, consumer prices in Canada dropped from 8.1% in June 2022 to 7.6% in July 2022 and 4.4% in April 2023. Canada's economy has benefited from the drop in inflation seen in recent months.

Canada: Inflation Rates
Date	Rate (%)
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
Mar-23	4.3
Apr-23	4.4

Since September 2021, India's cost of living has been on the rise. After a slow start to 2022, both growth and prices skyrocketed in March, April, and May. From July through September of 2022, inflation averaged 4.7%; by April 2023, it had dropped to its all-time low of 4.7%.

India: Inflation Rates
Date	Rate (%)
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
Mar-23	5.66
Apr-23	4.70

The declining value of the Indian rupee has prompted the Reserve Bank of India (RBI) and the government of India to increase prices.

5. Unemployment rate and Job Availability

Unemployment rates significantly impact the purchasing power of a country's currency. The economy benefits when more people are employed, and businesses hire new workers. The Canadian unemployment rate fell to 5% in April 2023 from 5.1% in November 2022. The unemployment rate fell from October to December, but it still needs to go down even further, and more job openings need to be created. As more people have entered the workforce since February 2022, domestic investment and inflation have fallen. The economy has improved, though, because people are saving more money.

Canada: Unemployment Rate
Date	Rate (%)
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
Feb-23	5
Mar-23	5
Apr-23	5

In August (2022), India's unemployment rate jumped from 6.8% in July (2022) to 8.2%. However, projections indicate that the figure will fall to 6.4% by September 2022.

India: Unemployment Rate
Date	Rate (%)
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
Feb-23	5
Mar-23	5
Apr-23	5

The unemployment rate, however, was 7.8% as of March 2023. Uncertainty about the economy has made consumers wary of making large purchases, which has slowed the inflow of foreign currency. Despite this, the recruitment efforts of MNCs have kept India's unemployment rate low.

6. Budget deficit and national debt levels

In all but a handful of cases, governments have accumulated debt. A country's currency value and inflation rate may suffer if its debt levels are too high. Governments create a budget for the following fiscal year when actual spending exceeds the planned levels, and inflation reduces the value of money.

On the other hand, Canada spent $3.91 billion less than expected during the first three months of 2022, resulting in a $59 million reduction in the country's external debt between the fourth and first quarters of 2022 and 2023. As a result, the value of the Canadian dollar has increased. Canada's trade surplus is expected to shrink from July's CAD 2,372.7M to November 2022's CAD 40M as exports increase faster than imports. The Canadian economy has been thriving thanks to the stability of the Canadian dollar.

Canada: Balance of Trade
Date	CAD $ Millions
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
Jan-23	1204.1
Feb-23	422.3
Mar-23	972.5

The national budget of India, published annually in February, shows that spending went up in the first quarter of 2022. At the end of the first quarter, India's total external debt was USD 620 billion, and it is expected to fall to USD 614 billion by the end of 2021.

It may have contributed to the falling value of the Indian rupee and the subsequent rise in inflation. The ongoing trade deficit that India has to be considered. Canada's trade deficit in April 2023 was only C$15.24 million, a far cry from India's massive negative delta in July and August 2022.

India: Balance of Trade
Date	CAD$ Millions
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
Feb-23	17.43
Mar-23	19.7
Apr-23	15.24

7. Politics and international policies

The people's confidence in their government is reflected in the value of their currency. The Indian government has been the target of numerous complaints, all contributing to the economy's shaky growth and the rupee's decline. Canada's and India's economies have suffered due to negative press coverage.

Compared to the Indian and American rupees, the Canadian dollar has fared better. Both currencies have experienced extreme volatility but ultimately prevailed. The value of the Indian rupee has dropped while the Canadian dollar has risen. The governments of both countries would benefit from a stable currency, but no amount of planning can guarantee that everything will be fine with the process. It is expected that the value of the rupee will remain stable throughout the year.