Rupee Has Long-Term Potential Against Aussie Dollar – Forbes Advisor Australia

As of March 2023, the Australian dollar is worth 55 Indian rupees. The past few months have seen little change between the AUD to INR conversion, with only a small fluctuation of a few rupees either way. 

Since June 2020, the conversion rate between the Australian dollar and Indian rupee has stayed fairly stable, with one dollar hovering between the value of 50-58 INR. That followed a large dip in March 2020, where the conversion fell to 43.13 INR due to the coronavirus pandemic. 

As global currencies continue their recovery from COVID-19, it’s expected that the Australian dollar and the Indian rupee will continue to trade firmly at the same rate, with the AUD remaining resilient at a time where INR is struggling to recoup its losses. 

Related: AUD to USD: Will the Dollar Rise?

The AU Dollar’s Outlook in 2022

As for many other currencies around the world, 2022 marked a difficult year for the Australian dollar. Economic recovery from COVID-19 is at the forefront of many central banks’ plans, and the Reserve Bank of Australia, or RBA, is no exception. 

The RBA began its harsh monetary policy cycle of raising rates early in 2022, with the 10th consecutive rate rise taking place this month. Consequently, the Australian dollar has been weakening against other currencies–largely, the USD. 

Since October 2022, however, the AUD had begun to reverse its losses as market sentiment improved and the USD rally lost steam, Bartosz Sawicki, a market analyst at global fintech Conotoxia told Forbes Advisor. 

The reversal of such losses has helped the Australian dollar regain more strength over the Indian rupee, ending the year of 2022 at a conversion rate of $1 AUD to ₹56.3 INR.

INR Performance & Drivers in 2022

While the Australian dollar began to fight back in late 2022, Sawicki said it hasn’t been the same story for the Indian rupee. 

“In contrast to the AUD [against the USD], the INR did not experience a significant bounce and ended the year hovering only a tad above all-time lows,” he explained. 

According to Reuters, the Indian rupee ended 2022 as one of the worst-performing Asian currencies with a fall of 10.14% (compared to the US dollar). It was the biggest annual decline for the Indian rupee since 2013. 

In the short term, the AUD may prove more resilient, whereas, in the longer term, the INR, which is modestly undervalued, has more potential

“Consequently, the rupee depreciated almost 4% against the Australian dollar in 2022, despite trading over 10% higher back in October,” Sawicki said. 

AUD to INR Six-Month Forecast

In the next six months, the INR should hopefully start to recover on the back of the US tightening monetary policy, robust GDP growth and falling inflation, Sawicki says. 

“However, the AUD should [also] strive in such an environment, especially given the improving macroeconomic performance of the Chinese economy and high commodity prices.” 

Overall, it is expected the conversion rate will continue moving “in AUD’s favour in the coming months”.  

A Reuters poll of foreign exchange strategists confirms this sentiment, stating that the Indian rupee is expected to remain at its current level for months to come, “barely recouping any of its losses from last year”. 

Australian Dollar to Indian Rupee Long-Term Forecast

Sawicki predicts that in the longer term, the Rupee will eventually outperform the Australian dollar. 

“By year-end, [the conversion] might decline as much as three to five per cent,” he says. 

“In the short term, the AUD may prove more resilient, whereas, in the longer term, the INR, which is modestly undervalued, has more potential.”