What does the year ahead look like for the AUD/INR exchange rate? Will ongoing central bank intervention keep the rupee at a steady level? Will the Aussie dollar experience a resurgence?
AUD vs INR forecast
The AUD/INR exchange rate is expected to remain flat in the first half of 2024. Analysts are generally predicting the Australian dollar to rise slightly in value against several major currencies in the next 12 months. With future rate cuts expected in the US, this could push the value of the Aussie dollar slightly higher.
Meanwhile, a Reuters poll published in January 2024 revealed that FX strategists expect the Reserve Bank of India to continue to use its cash reserves to keep the value of the rupee relatively stable. Analysts predict that this ongoing market intervention should keep the rupee's volatility to a minimum.
Combined with a cautious but steady outlook for the AUD, this is expected to keep the AUD/INR exchange rate on a fairly even keel. But with the INR trading at or near all-time lows (against the USD) in recent times, there remains potential for the INR to rise in value in the long-term.
Key factors impacting the AUD and INR
There are several factors to take into account when predicting the future movements of the AUD/INR exchange rate. These include:
Inflation. The rising cost of living has been a key driving factor in Australia and affecting economies around the world. High inflation decreases the purchasing power of a currency, but the rate of inflation is slowing as we move into 2024,
Interest rates. High interest rates, such as those we have in Australia currently, increase foreign investment demand for the AUD. However, rates are higher in the US, drawing investor funds away from the Aussie dollar. And with the potential for rate cuts at some stage in the next 12 months, this could further impact the dollar's value.
Commodity prices. Australia's economy is well known for its reliance on commodities. As a result, rises and falls in commodity prices can impact the value of the Aussie dollar. For example, China's slower than expected recovery from the pandemic restricted demand for exports such as iron ore, impacting the dollar.
RBI intervention. As already mentioned, the Reserve Bank of India regularly intervened in currency markets in 2023 to protect the rupee exchange rate against the rising US dollar. A January 2024 Reuters poll of FX strategists revealed that those analysts expected this trend to continue in coming months, helping the INR remain relatively stable.
India's economic outlook. The UN predicts that India's economy will grow 6.2% in 2024, making it one of the strongest performers among major economies. But there are also some factors that could make their impact felt, including 2024 being an election year in India, the uncertain global economic outlook and the potential impact of climate change on agriculture. Despite this, economists are generally optimistic about India's growth in 2024.
The AUD to INR exchange rate remained fairly steady throughout 2023. After opening the year trading at 56 INR, the dollar fell below 54 INR in March. It then traded in the 54-56 INR range through August.
During November, the rupee fell to all-time lows against the US dollar, as rising U.S. Treasury yields drove the INR down. The AUD/INR rate reached 1 AUD = 52.5 INR during this period, but it rebounded to close out the year with the Australian dollar trading at 56 INR once again.
The best time to exchange AUD to INR
The best time to exchange AUD to INR is when the AUD/INR exchange rate is at its highest, as this is when the dollar will allow you to purchase the maximum amount of rupees.
But as you can see above, there are myriad factors that can affect the value of one currency relative to another. That's why if you regularly need to send money to India or exchange between the two currencies, it pays to stay up to date with economic and political news in Australia and India.
That said, it's still difficult to accurately predict which way exchange rates will move in the weeks and months ahead. So if you have frequent currency exchange needs, consider creating an account with a specialist foreign exchange company that can provide advice and analysis from FX experts to help you time your transaction to get the best rate.
Specialist money transfer providers can also help you save if you need to send a large money transfer from Australia to India. Some providers offer better exchange rates on large transfer amounts. They also offer forward contracts, so you can lock in an exchange rate today for a transfer that will be sent months in the future. Another option is to place a limit order so that your transfer will be automatically sent once the exchange rate you want becomes available.
Tim Falk is a writer for Finder, writing across a diverse range of topics. Over the course of his 15-year writing career, Tim has reported on everything from travel and personal finance to pets and TV soap operas. When he’s not staring at his computer, you can usually find him exploring the great outdoors.
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