Forecasts for the Indian rupee change all the time, affected by news events and relative sentiment towards the Indian economy. This continually updated article reviews the latest forecasts from banks and FX experts as well as news and recent movements of INR in the currency markets.
Most Asian currencies have weakened against the 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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Before this pivot by the Fed Reserve the Reserve Bank of India’s announcement of a huge government bond purchase programme in April ended the Indian rupee’s resilience to U.S. dollar strength and other currencies such as GBP and AUD.
The Indian rupee was Asia’s worse performing currency in 2020, but compared to previous crises performed relatively well.
Migrant workers from Asia’s developing countries, such as India, have been sending home record amounts of money in recent months, defying pandemic expectations and propping up home economies at a critical time.
However, it appears workers are just sending money home in advance of their own return due to a bleak job market, particularly in the Middle East.
INR did gain more than 2% in 3Q, despite having an economy ravaged by 6.6 million coronavirus infections. The support for the Indian rupee comes from a rare current account surplus, and billions of dollars in inflows.
The Indian rupee exhibits strong seasonal patterns: the rupee typically falls in value every second-quarter (April-to-June) due to India’s heightened gold demand heading into Akshaya Tritiya – the annual spring time festival of the Hindus and Jains.
Accordingly many currency forecasts point out that rupee strength is to be expected in the second half of a typical year.
You can also read our full Foreign Exchange Guide to India.
Whether the rupee will rise or drop in the future is a difficult question and the answer really depends on many factors. The best way to consider an exchange rate’s current relative value is to look at the Indian Rupee’s history against a range of currencies and in particular against the currency you are interested in exchanging it with.
For example, the sections below look at the change in the INR exchange rate to the present day for periods back 10 years for popular INR exchange rates.
The rupee weakness in September has continued into October dropping from 73 to 75 per USD, after powering ahead in late August gaining almost 2% as speculation grew that the central bank was relaxing its control over the currency. USD-INR Outlook
In September the European energy crisis pushed the Pound down against the Rupee. At the end of the month the GBP/INR exchange rate hit a low below the 100 mark but has recovered into October after Boris called the army out to drive the fuel trucks. GBP-INR Outlook
AUD/INR has risen 3 percent back to the 55 level since late September mainly due to AUD strength as Australia profits from energy prices hikes.
In September the ‘risk off’ market mood has pushed the Australian dollar further down against the Rupee. After peaking in April near 58 the AUD/INR exchange rate changed direction and has headed down towards the 53-54 mark.AUD-INR Outlook
In September the ‘risk off’ market mood had pushed the Canadian dollar down against the Rupee. Also helping the rupee was speculation the Indian central bank was relaxing its control over INR.
However in October CAD/INR has risen from 57 to above 60, the loonie has been helped along by the end of any election uncertainty and the strong demand for gas from the energy crisis in Europe.CAD-INR Outlook
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.