USD to INR Forecasts
USD/INR forecasts change all the time, affected by news events and relative sentiment towards the US and Indian economies and this exchange rate is even more volatile than usual because of the uncertainties around the Coranavirus pandemic.
SupportRupee Outlook
However, the recent flop of the PayTM IPO and some others suggests that the rupee in 2022 won’t benefit so much from another inflow of funds.
| USD/INR was | Change | Period |
|---|---|---|
73.80 12 Jan 2022 | 1.7% ▲ | 2 Weeks |
74.80 28 Oct 2021 | 0.3% ▲ | 90 Days |
72.92 26 Jan 2021 | 2.9% ▲ | 1 Year |
68.11 27 Jan 2017 | 10.2% ▲ | 5 Years |
49.36 29 Jan 2012 | 52% ▲ | 10 Years |
48.53 31 Jan 2002 | 54.6% ▲ | 20 Years |
Most Asian currencies weakened in 2021 (including the rupee) 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.
In 2021 the market’s expectation for a rise in US inflation and thus interest rates pushed up the USD exchange rate against most currencies.
This trend is seemingly continuing into 2022 although with a slight hiccup for the greenback mid January with Mr Powell’s confirmation hearing testimony disappointing the markets about the imminence of rate hikes.
Any gaining in favour for the rupee is attributed by bank commentators such as HSBC to the attraction of the carry trade — the ability to earn higher interest when holding INR versus other major currencies.
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.
The foreign exchange market convention for USD/INR is to quote Indian Rupee as Rupee per US dollar. Thus a higher USD/INR rate actually means one rupee is worth less, that is you can buy more rupee for 1 USD.
You can read about other USD exchange rate forecasts here US Dollar Trends and Forecasts for 2021.
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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.