Why is the CAD to INR Exchange Rate Up today on 14th October 2022 (1st half of October 2022)?

Updated on: 2022-10-19 - 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 14th October 2022 (1st half of October 2022)?

The CAD to INR exchange rate has steadily increased during the last five years. As of October 14, 2022, one Canadian dollar equals 59.6 Indian rupees. On October 07, 2022, the value reached a high of 60.34. Nonetheless, on October 03, 2022, the nadir was 58.05. The Canadian dollar has been trading at 59.65 Indian rupees on average. According to the graph below, the trend curve has been irregular during the previous two weeks, with a standard deviation of 0.256 rupees (October 03, 2022, to October 14, 2022). As seen by the rise in exchange rates, the Canadian dollar has regained some of its worth. The currency will very certainly be worth more than 60 rupees. What was formerly 50-55 rupees has already reached the 60-rupee mark. Higher gasoline prices, a strong currency, and a trade and foreign capital imbalance might all blame.

CAD to INR Exchange Rates (1 CAD into INR)
Date Open High Low Close
October 03, 2022 58.05 59.76 58.05 58.87
October 04, 2022 59.75 60.05 59.55 59.73
October 05, 2022 60.24 60.26 59.57 60.26
October 06, 2022 59.99 60.15 59.62 59.98
October 07, 2022 59.88 60.34 59.68 59.87
October 10, 2022 59.59 60.09 59.59 60.24
October 11, 2022 59.78 59.80 59.35 59.77
October 12, 2022 59.61 59.77 59.41 59.59
October 13, 2022 59.42 59.82 58.85 59.43
October 14, 2022 59.65 60.05 59.19 59.67

Several factors affect the CAD to INR exchange rates

1. Crude Oil

India has one of the world's largest populations. India imports more than 80% of what it needs from other countries to meet its crude oil consumption. The global economy has been quite volatile. It has also been noted in the price of crude oil. The price peaked at CAD 126.22 on October 10, 2022. According to the trend line, prices have been climbing since October 03, 2022. On October 03, 2022, prices fell to CAD 106.43. Although it may be seen favorably, the volatility implies otherwise.

A cost reduction may mean that product production, shipping, and manufacturing may be simplified and more economical. It might cause inflation to fall, enhancing the value of the Indian rupee. However, this has not been the case. Some additional factors contribute to the rupee's dismal performance.

Crude Oil (in CAD)
Date High (CAD) Low (CAD) Close (CAD)
October 03, 2022 111.29 106.43 110.07
October 04, 2022 115.22 110.24 114.61
October 05, 2022 117.23 113.25 116.35
October 06, 2022 117.96 115.27 117.13
October 07, 2022 124.69 117.59 123.79
October 10, 2022 126.22 122.04 122.83
October 11, 2022 123.06 118.42 120.36
October 12, 2022 122.32 117.18 118.52
October 13, 2022 122.93 117.31 122.18
October 14, 2022 123.13 116.91 117.47

Canada is also largely dependent on crude oil. Their crude oil export usually exceeds their crude oil import. However, their imports are likely to skyrocket in 2022. In the second quarter of 2022, they imported 1754 million Canadian dollars of crude oil. This sum is far higher than their initial import, which was regularly between $1000 and $1500 million (CAD). Because the cost of crude oil imports in Canada is rising, the Canadian dollar may perform well against the US dollar.

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

2. Commodity Prices and Import/Export

Metal ores and minerals, refined petroleum products, plastic and rubber items, chemicals, energy products, and other commodities have been imported into Canada and India. Because the overall import-export imbalance influences the currency's performance versus the US dollar, the items mentioned above substantially impact the CAD-INR exchange rate.

Canada imported energy products worth 9702 million Canadian dollars in August 2022, 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's total imports were 63864.00 million Canadian dollars, while its total exports were 65383.00 million. As seen by the Canadian dollar's strength versus the US dollar, the currency has profited from an optimistic difference between exports and imports. Aside from that, prices have plummeted from 32.4% in June 2022 to 19.1% in July 2022 and 17.6% in August 2022.

Canada: Commodity Prices
Date % change YOY
Sep-21 32.5
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 17.6

Similarly, India imported similar goods. The entire value of India's imports was 81.91 billion Canadian dollars. However, India's exports were just 45.02 billion Canadian dollars. This significant negative gap between imports and exports has resulted in a low GDP, which has induced inflation, lowering the value of the Indian rupee.

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

Inflation has an impact on commodity prices. According to the data above, commodity costs have risen considerably from 182.9 basis points in July 2022 to 192.3 basis points in August 2022. This trade deficit supports and validates the Indian currency's poor performance against the USD and CAD.

3. Interest rates

In Canada, inflation is expected to climb higher. They also hope that restoring economic stability will be more costly. They forecast worldwide economic growth of 3.5% in 2022, 2% in 2023, and 3% in 2024. The Bank of Canada has implemented remedial measures to mitigate the impact of the country's struggling economy on its residents.

One example was a 100-basis-point increase in interest rates. The bank believes this will assist consumers, businesses, and individuals as they consider the more enormous consequences of rising inflation rates. They plan to reduce inflation to 2% by 2024. Interest rates will rise sharply beginning in March 2022, reflecting growing inflation rates. From 2.5% in June and August 2022 to 3.25% in September 2022, there has been a 0.75% rise.

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

The Reserve Bank of India has followed suit. The Reserve Bank of India hiked interest rates by 50 basis points. Interest rates have risen from 4.9% in June 2022 to 5.4% in July and August this year. Experts predict that interest rates will climb further by December 2022. India intends to cut 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 boosts lending and borrowing rates in public and private institutions, making citizens' lives more difficult. These interest rates directly impact inflation and, as a result, the currency's value. Inflation diminishes money's buying power.

4. Inflation

The inflation rate offers information on the performance and value of the currency. Inflation diminishes money's buying power. Inflation is a problem in almost every economy today. While some countries suffer, others can deal with the repercussions.

Canada's inflation rate has also grown considerably. The inflation rate rose by 5% in a year. Canada was one of the countries most impacted by the coronavirus outbreak. The government's stringent regulations hampered manufacturing expansion, with disastrous repercussions. Rising inflation rates substantiate this. While the Bank of Canada hiked repo rates in June 2022 to battle inflation, the inflation rate has dropped from 8.1% in June 2022 to 7.6% and 7% in July and August 2022, respectively. Inflation has decreased, indicating that the Canadian economy is performing 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

Since September 2021, inflation in India has been growing. Growth appeared to be slowing at the start of 2022, but inflation rates spiked in March, April, and May. Inflation rates have climbed from 6.71% in July 2022 to 7.41% in September 2022, following a reduction in July 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

Inflationary pressures appear to be rising, which is a bad sign. The RBI and the Indian government appear to be failing to control inflation, reflecting the currency's performance.

5. Unemployment rate and Job Availability

Employment rates and job availability have an indirect influence on the currency. Increased employment and job availability suggest that the economy is settling down. Canada's unemployment rate has dropped from 5.1% in May 2022 to 4.9% in June 2022. Rates, however, will rise to 5.4% in August 2022. Despite a 0.2% decline in September, people have trouble finding a job. It means that more people are finding work. Since February 2022, the employment rate has been relatively high. However, it has recently fallen. The domestic investment will increase as employed individuals have greater purchasing power, cutting inflation. It boosts the performance and value of 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

However, in India, the unemployment rate has increased from 6.8% in July 2022 to 8.2% in August 2022. Nonetheless, the unemployment rate declined dramatically in September 2022, falling to 6.4%. Its uncertainty and insecurity have reduced people's purchasing power, decreasing domestic investment in the country. Several international firms in India have lifted hiring restrictions, which might explain the low unemployment rate.

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

Almost every country is in debt. While these responsibilities are reasonable, rising debt levels induce inflation, causing the currency to fall in value. Similarly, when actual expenditure exceeds the budget and inflation rises, undermining the money, the government proposes its budget for the following fiscal year.

Canada spent USD 3.91 billion less than it had budgeted in the first quarter. Furthermore, their external debt fell from $USD 2.59 billion in the fourth quarter of 2021 to $ 2.49 billion in the first quarter of 2022. As a result, the Canadian dollar has risen in value. The graph below shows that Canada's exports often exceed their imports. Imports surpassed exports only in December 2021. The country has maintained a positive delta into 2022. They had a CAD 2372.7M differential in July and a CAD 1519M delta in August 2022. Canada's performance in this regard reflects the strength of the Canadian dollar.

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 publishes its union budget each year in February. In the first quarter of 2022, India spent USD 13.4 billion more than the budgeted amount. India's external debt was USD 620 billion at the end of the first quarter of 2022. It increased from USD 614 billion in the fourth quarter of 2021. It has increased inflation in the country, devaluing the rupee. Another consideration is the trade balance. India's imports have consistently exceeded their exports. In July and August 2022, India experienced a significant negative delta. By September 2022, however, it had decreased 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

A government's stability also impacts the country’s currency—more upheavals and rallies against the government, fewer foreign investments, and a lower currency value. The Indian government has recently faced scathing criticism from its citizens for various reasons, including religion, taxation, political party instability, etc. It has resulted in only a few sections of the country prospering. Its erratic growth has also resulted in the depreciation of the Indian rupee.

Both Canada and India have faced widespread outcry. Both currencies have suffered as a result. Canada, on the other hand, has outperformed both the US dollar and the Indian rupee.

Due to significant volatility and instability, both currencies have underperformed. The Indian rupee, on the other hand, has fared significantly worse than the Canadian dollar. Both coins have performed poorly versus the US dollar. Nonetheless, as compared to other currencies, the Canadian dollar has done substantially better. While both governments work to support their respective currencies, unanticipated events provide difficulties. The rupee is expected to fall further before recovering value at the beginning of the following year.