The market for the INR to CAD exchange rate is currently range-bound.
Key drivers include the interest rate differential, with Canada maintaining a policy rate of 2.25% while the Reserve Bank of India faces pressures that may keep rates lower. Additionally, Canada’s stronger-than-expected jobs report may support the CAD, while the recent dip in oil prices could limit upward movement due to its impact on the Canadian economy. Furthermore, inflationary pressures in India could weigh on the INR.
Expect the INR to CAD exchange rate to trade within a stable range in the near term.
An upside risk could emerge from potential improvements in U.S.-India trade relations, while a downside risk may stem from continued foreign portfolio outflows affecting the INR negatively. Notably, recent trading suggests INR to CAD is currently at 7-day highs, albeit still below its 3-month average, indicating some volatility in the market.