Why is the CAD to INR Exchange Rate Up today on 31st October 2022 (2nd half of October 2022)?

Updated on: 2022-10-31 - 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 31st October 2022 (2nd half of October 2022)?

The exchange rate between Canadian dollars and Indian rupees has increased steadily in the last five years. One Canadian dollar is worth 60.41 Indian rupees as of October 31, 2022. The price hit a high of 60.94 on October 25, 2022. Still, the low point was 58.66 on October 16, 2022. The average price of the Canadian dollar in Indian rupees is 60.11 rupees. The graph below shows that the trend curve has been erratic over the past two weeks, with a standard deviation of 0.275 rupees (October 16, 2022, to October 31, 2022). The Canadian dollar has regained some of its value, as shown by the rise in exchange rates. There is no doubt that the money will be worth more than 60 rupees. What used to cost between 50 and 55 rupees now costs 60 rupees. A strong currency, a trade and foreign capital imbalance, and higher gas prices could all be to blame.

CAD to INR Exchange Rates (1 CAD into INR)
Date Open High Low Close
Oct 16, 2022 58.66 59.84 58.66 59.28
Oct 17, 2022 59.87 60.04 59.58 59.87
Oct 18, 2022 59.89 60.42 59.71 59.89
Oct 19, 2022 60.21 60.43 60.05 60.22
Oct 20, 2022 60.07 60.37 59.76 60.05
Oct 23, 2022 59.16 60.46 59.16 60.45
Oct 24, 2022 60.36 60.57 60.13 60.38
Oct 25, 2022 60.48 60.94 60.01 60.48
Oct 26, 2022 60.38 60.87 60.33 60.40
Oct 27, 2022 60.69 60.85 60.34 60.69
Oct 31, 2022 60.07 60.67 60.07 60.41

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 one of the most people in the world. India gets more than 80% of the crude oil it needs from countries other than its own. There has been a lot of change in the world economy. The price of crude oil has also shown this. On October 27, 2022, the price reached its highest point of CAD 121.79. The trend line shows that prices have changed since October 17, 2022. Prices dropped to CAD 112.68 on October 18, 2022. Even though it could be seen as a good thing, the fact that it changes shows that it isn't.

If the price of something goes down, it may be easier and cheaper to make, ship, and make the product. It could make inflation go down, which would make the Indian rupee worth more. It has not happened, though. Some other things also cause the rupee's poor performance.

Crude Oil (in CAD)
Date High (CAD) Low (CAD) Close (CAD)
Oct 17, 2022 119.47 116.03 117.19
Oct 18, 2022 118.74 112.68 113.68
Oct 19, 2022 118.72 113.75 117.83
Oct 20, 2022 121.47 117.41 118.45
Oct 21, 2022 117.22 113.47 116.06
Oct 24, 2022 117.67 113.16 115.83
Oct 25, 2022 117.15 113.10 116.18
Oct 26, 2022 119.81 114.03 119.14
Oct 27, 2022 121.79 118.45 120.83
Oct 31, 2022 120.63 116.08 117.75

Canada is also largely dependent on crude oil. Most of the time, they sell more crude oil than they bring in. But their imports are likely to go through the roof in 2022. In the second quarter of 2022, they brought in crude oil worth CAD 1,754,000,000. This amount is much more than what they initially brought in, usually between $1 billion and $1.5 billion (CAD). The Canadian dollar may do well against the US dollar because the cost of importing crude oil is rising.

The performance disparity between the Indian rupee and the Canadian dollar versus the US dollar, on the other hand, suggests that the rupee's value against CAD may continue to fall.

2. Commodity Prices and Import/Export

Canada and India have imported metal ores and minerals, refined petroleum products, plastic and rubber goods, chemicals, energy products, and other goods. 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 imported 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. In August 2022, Canada imported a total of 63864,000,000 CAD and exported a total of 65383,000,000 CAD. As shown by how strong the Canadian dollar is against the US dollar, a positive difference between exports and imports has helped the currency. Aside from that, prices have dropped 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

India brought in the same kinds of goods. The value of everything India brought into Canada was 81.91 billion Canadian dollars. But India only sent out 45.02 billion Canadian dollars worth of goods. This significant difference between imports and exports has led to a low GDP, which has caused inflation and made the Indian rupee less valuable.

India: Commodity Prices
Date Base Points change YOY)
Sep-21 163.2
Oct-21 165.5
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-22 182.9
Aug-22 192.3
commodity -prices-india-from-sep-2021-to-aug-2022

Prices of goods are affected by inflation. From 182.9 basis points in July 2022 to 192.3 basis points in August 2022, commodities prices have increased by a lot. This trade deficit backs up and proves that the Indian currency isn't doing well against the US and Canadian dollar.

3. Interest rates

In Canada, people expect inflation to go up. They also hope it will cost more to get the economy back on track. They think that the whole world's 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 struggling economy.

One example is when interest rates went up by 100 basis points. The bank thinks this will help consumers, businesses, and people when considering the more significant effects of rising inflation rates. By 2024, they want to get inflation down to 2%. As inflation rates rise, interest rates will go up sharply beginning in March 2022. The rate has increased by 0.75%, from 2.5% in June and August 2022 to 3.25% in September 2022.

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

After that, the Reserve Bank of India did the same thing. Fifty basis points raised rates by the Reserve Bank of India. From 4.9% in June 2022 to 5.4% in July and August this year, interest rates have increased. By December 2022, experts think interest rates will have increased even more. India wants to lower inflation 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 borrow and lend money from the public and private institutions. These interest rates directly affect inflation, which in turn affects the currency's value. Inflation makes money less valuable.

4. Inflation rates

The inflation rate shows how the currency is doing and how much it is worth. Inflation makes money less valuable. Almost every economy is having trouble with inflation right now. The effects hurt some countries, but others can handle them.

Canada's rate of inflation has also gone up a lot. In a year, the rate of inflation went up by 5%. Canada was one of the places where the coronavirus outbreak hurt the most. The government's strict rules stopped factories from growing, which was terrible. The fact that inflation rates are going up proves this. 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 7% in August 2022. The fact that inflation has decreased shows that the Canadian economy is doing well.

Canada: Inflation Rates
Date Rate (%)
Sep-21 4.40
Oct-21 4.70
Nov-21 4.70
Dec-21 4.80
Jan-22 5.10
Feb-22 5.70
Mar-22 6.70
Apr-22 6.80
May-22 7.70
Jun-22 8.10
Jul-22 7.60
Aug-22 7.00

India's price level has been going up since September 2021. At the beginning 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 from 6.71% to 7.41% in September 2022.

India: Inflation Rates
Date Rate (%)
Sep-21 4.35
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 7.00
Sep-22 7.41

It looks like inflationary pressures are rising, which is not a good sign. The currency's performance shows that the RBI and the Indian government don't seem to be able to control inflation.

5. Unemployment rate and Job Availability

The currency is indirectly affected by the rate of unemployment and the number of available jobs. The economy seems to be getting better because there are more jobs and more people are working. In June 2022, Canada's unemployment rate was 4.9%, down from 5.1% in May 2022. Rates will go up to 5.4% in August 2022, though. Even though it decreased by 0.2% in September, people still have trouble finding work. It means that there are more people getting jobs. Since February 2022, there have been a lot of jobs available. But it has recently gone down. As more people get jobs and have more money to spend, domestic investment and inflation will go down. It makes things better and saves money.

Canada: Unemployment Rate
Date Rate (%)
Dec-21 6
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

India's unemployment rate, on the other hand, has gone up 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%. Uncertainty and fear have made people less able to buy things, 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 (%)
Oct-21 7.74
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

6. Budget deficit and national debt levels

Nearly every country owes money. Even though these responsibilities are fair, rising debt levels cause 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 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 external debt went down from $USD 2.59 billion in the fourth quarter of 2021 to $USD 2.49 billion in the first quarter of 2022. Because of this, the value of the Canadian dollar has gone up. 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. They had a difference of CAD 2,372.7M in July and a difference of CAD 1,519M in August 2022. 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 made inflation worse in the country, hurting the rupee's value. The trade balance is another thing to think about. India's imports have always been higher than its exports. India had a vast negative delta in July and August of 2022. By September 2022, though, it had gone down 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 stability of a government also affects the value of a country's currency. A less stable government means more protests and rallies against it, less foreign investment, and a weaker currency. People in India have recently been very harsh on their government for many reasons, such as religion, taxes, the instability of political parties, etc. Because of this, only a few parts of the country are doing well. Its growth has been all over the place, which has hurt the value of the Indian rupee.

A lot of people have criticized both Canada and India. Because of this, both currencies have lost value. On the other hand, the US dollar and the Indian rupee have done worse than Canada.

Both currencies have done poorly because they have been volatile. On the other hand, the Indian rupee has done much worse than the Canadian dollar. Both coins have poorly done when compared to the US dollar. The Canadian dollar has done much better than most other currencies. Even though both governments work to support their currencies, unplanned events cause problems. The value of the rupee is likely to go down even more before it starts to rise again at the start of the following year.