In 2021 forecasts and predictions for the CAD/INR exchange rate are driven by the energy crisis and lingering effects of the Coronavirus pandemic rather than any fundamentals or relative sentiment towards the Canadian and Indian economies.
The Ukrainian crisis and the risk-off market for European energy supplies have pushed the Canadian dollar down against the Rupee.
At the end of the January the CAD/INR exchange rate was heading towards the 59 mark down from its highs around 61 in October last year.
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Since the initial pandemic shock in March last year CAD/INR has risen around 30 percent, welcome news for Indian expat workers, who represent one of the largest groups remitting money from Canada.
Unlike Latin American countries, which continue to benefit from a U.S. recovery, Asian countries are vulnerable to economic austerity in Saudi Arabia and elsewhere in the Middle East due to the drop in demand for Oil during the Covid pandemic. More than 60% of remittances to India, Bangladesh and Pakistan come from Gulf countries.
Note that forecasts and predictions for the CAD/INR exchange rate change all the time, affected by news events and relative sentiment towards the Canadian and Indian economies and this exchange rate is even more volatile than usual because of the uncertainties around the Coronavirus pandemic.
You can read more about CAD cross-rate forecasts here CAD Trends and Forecasts for 2021.
Before Russia invaded Ukraine the CAD was being supported by expectations of domestic interest rate hikes – and the oil price was a key driver of CAD strength at the start of the year.
Since the start of the Russia/Ukrainian war the risk on-off market are pushing the Canadian dollar rate up and down in a range around 0.7850 to the US dollar (1 USD = 1.27 CAD).
The Indian rupee has weakened (like most Asian currencies) against the US dollar on fears that surging energy prices could spur inflation and interest rate hikes.
India imports most of its oil requirements and higher crude prices tend to push up domestic inflation.
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Disclaimer: Please note any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.