USD to INR: A Comprehensive Analysis for 2024

Now that half of 2024 has passed, it is important to start planning forward and learning what the forecast rates for the year are. This is particularly important if you are thinking about sending money from India to the USA or traveling to the USA in between the rest of the year since it will explain when is the best time to exchange your currency and how to take advantage of a good exchange rate.

To make smart decisions in 2024 and beyond, understanding the USD to INR exchange rate requires knowledge of market trends and using available resources. For your convenience, we have put together professional forecasts and predictions in a single place. In this article, we are going to discuss the analysis of USD to INR. 

When working with foreign clients or visiting a foreign nation, one must be aware of how much their currency will be exchanged for the home currency of the client or visiting nation. One therefore requires a money or currency converter. 

For example, if you're visiting a foreign country like Sri Lanka, you can only convert the necessary amount of US dollars into local currency to cover expenses when visiting. For same, first you need to convert INR into US dollars. All you have to do is budget, find out conversion rates using a currency converter calculator, and pay what is needed.

‍

Factors Affecting the Strength and Variations of Exchange Rates

The strength of the USD compared to the INR and the resulting variations in the exchange rate have been caused by a number of reasons. Economic factors have been an important field including GDP growth rates, inflation rates, and employment figures. In addition, market sentiment and currency valuations have been affected by trade policies, geopolitical developments, and interest rate differences between the US and India.

Investor confidence in the strong US economy was strengthened by the pandemic consequences, and the USD to INR exchange rate changed in 2023 due to a combination of geopolitical events, trade imbalances, and economic data. 

‍

USD to INR Forecast for 2024

‍

The USD to INR exchange rate is expected to rise within the next few months. Forecasts for the upcoming half-year by Bloomberg suggests an exchange rate of INR at 82.80 per dollar by December. (Top Forecaster Defies India Rupee Bulls as Record Low Looms published on 23 May 2024) Yet concurrently the rate stands at ₹83.62 Indian Rupee on 20 Jun at 11:04 am UTC as per Google Finance. 2023 had been a stable year for INR despite its multitude of constant depreciation. However, according to Reuters, analysts suggest INR may have lessened depreciation compared to its previous years against the USD as per its performance and the US inflationary cycle. This eventually may be the cause of foreign goods and services becoming more attractive to consumers and businesses since they're cheaper. The substitution means that imports will increase in the US. Consequently, this causes an increase in the currency supply in forex to India which results in a depreciated currency. And, it will cause depreciation of USD and gradual appreciation of IN end up reaching 82.78 by the end of year (Rupee inches up, some analysts see a significantly better 2024 published on 28 Dec 2023)

‍

Against the basket of important currencies including Euro, Sterling Pound, the US Dollar has been doing exceptionally better which therefore is increasing the dollar index.  In an interview Candace Browning, head of Global Research, Bank of America, with Economic Times states ('We expect rupee to be the best-performing Asian currency in 2024’ published on Jun 03, 2024), Indian rupee had started its 2024 on a promising note and so far it has turned out to be the best-performing Asian currency, despite the rise in the dollar index. 

‍

‍

As per Business Standard, Indian rupee is at its least volatile position in the course of its last twenty years and has demonstrated resilience,  trading at 82.95 on 27th February ‘24 against the US Dollar and showing the signs of a structural uptrend. An uptrend is characterized by the chart's peaks and troughs reaching new highs as the trend progresses. So, if you look at the chart over time, it may be zigzagging, but it's generally going up.

Since the US dollar is a counter cyclical currency, one is ought to wait for a US recession, likewise in an interview with Economic times (‘5-10 years will be great for Indian rupee: Maneesh Dangi’ published on Dec 09, 2023, 02:45:00 PM IST) , Maneesh Dangi, Founder of Macro Mosaic Investing & Research suggests the next 5, 10 years will be great for INR. The continuous 3-4-5% depreciation would pause in this period as indicated by the potential INR has shown in 2023. 

However, in an article by Business Standard (Danske Bank opposes majority, says rupee bulls wrong as record low looms published on May 23 2024) as per Allan von Mehren, chief analyst at Danske Bank, currency may decline to 83.60 per dollar by December. In Bloomberg’s quarterly rankings, he has had the most accurate estimates.

As previously said, Global brokerage firm Goldman Sachs’ one-year prediction is anticipating that INR may rise to 81 against the US dollar by the end of the year. (By India Today in an article Will it be a good year for the Indian rupee? Here’s what Goldman Sachs says published on Jan 2, 2024)

Conversion Of USD To INR

The last thing you want is to end up paying a lot of money on conversion fees or exchanging currency from unlicensed money exchanges, which could lead to potential legal complications. Follow the 30/70 rule. Carry 30% of the required foreign currency as cash in multiple denominations and the remaining 70% in a forex travel card. 

Though calculators for exchange rates are available one can calculate it manually as well. If we consider the exchange rate as on 20th June  2024, where it stood at 83.64, then one may calculate the price as per given table (sourced by Google Finance)

‍

Historical Context

History began in 1944 with the passing of the Bretton Woods agreement. Every currency in the world was valued according to this agreement. When India became independent, everyone was gradually getting used to it.

Compared to the USD, the value of INR is now lower, but this was not always the case. Everything was quite different in 1947 when India gained its independence. One INR is thought to have been worth one USD in the past.

There are several opinions regarding the relative value of one rupee in 1947 versus now. The most prevalent one, nevertheless, is that all currencies had the same value since there was no metric system.) 

‍

‍

 Another argument is that, due to the higher value of the British pound before 1947, the value of the INR was higher since India was a British colony before 1947. It is thought that in 1947, one pound was the same as 13.37 rupees, which is why the value of USD should be INR 4.16 in 1947. (As per Forbes article, ‘1 USD to INR: From 1947 to 2024’ published on 20/05/2024)

By 1970, INR was worth 7.50 to 1 USD. For a very long time, Indian currency has been steadily depreciating, especially after 2008, for a good 15 years. (Value of 1 USD in INR since 1947 by BankBazaar updated on 20 June 2024)

‍

Conclusion

Making smart financial decisions requires keeping up with currency trends as the USD to INR forecast for 2024 develops. Individuals can move through the currency landscape with confidence and knowledge by studying exchange rate patterns and investigating effective transfer options, regardless of whether they choose to make overseas transactions for company or personal use.

There has been news as per TOI, there have been talks going on for RBI taking measures to make INR acceptable in Thailand which will create an increase & make the country a better suited overseas holiday destination for Indians. Until then, if you wish to visit Thailand, You'll have to convert your money before you plan to travel to Thailand. (Soon You May Be Able To Tip In Rupees In Thailand! RBI, Government Look To Popularise Use Of Indian Currency on Apr 16, 2024, 13:14 IST

Also, keep in mind that the predictions can often be inaccurate and might be updated. Forecasts for the USD to INR are based on the US and Indian economies' health, central bank policies, and inflation rates which vary over different times. For example, In early 2023, many economists had collectively predicted a high recession in the United States. The recession America was expecting never showed up. Instead, the economy grew 3.1 percent last year, up from less than 1 percent in 2022 as per the Forbes (in an article ‘Economists Predicted a Recession. So Far They’ve Been Wrong’ published on Jan. 26, 2024).

‍

The introduction of different new policies for the health of the economy may lead to disruption in such forecasts and so one may examine the ongoing market trends before choosing to make overseas transactions.

‍

Frequently Asked Questions (FAQs)

‍

1. Will the USD to INR exchange rate remain stable?

No, the USD to INR conversion rate won't be constant. This is because geopolitical and economic issues, such as interest rates, inflation rates, government performance, political stability, recession, trade terms and negotiations, government debt, current account deficit, etc., are what create variations in the currency exchange rate. 

‍

2. Why is forecasting USD to INR so important?

The influence of the demand and supply relationship contributes to the currency exchange market's high degree of instability.

The estimated value of the dollar to the Indian rupee is necessary in order to calculate the foreign currency cash flow involved in international transactions. This is necessary for figuring out the benefits and dangers of currency conversion. 

‍

3. What factors influence the USD/INR exchange rate?

The following variables have an impact on the USD/INR exchange rate: interest rates, inflation rates, government debt, terms of trade, political stability and performance, economic cycle, market participants' speculation, banks, importers and exporters, etc.

‍

Sources

• 5-10 years will be great for Indian rupee: Maneesh Dangi :

https://m.economictimes.com/markets/expert-view/given-a-us-recession-dollar-may-enter-5-10-years-of-bear-market-how-can-indian-investors-participate-maneesh-dangi-explains/articleshow/105827797.cms

• 'We expect rupee to be the best-performing Asian currency in 2024’

https://m.economictimes.com/markets/expert-view/we-expect-rupee-to-be-the-best-performing-asian-currency-in-2024/amp_articleshow/110649806.cms

• ‘Economists Predicted a Recession. So Far They’ve Been Wrong’

https://www.nytimes.com/2024/01/26/business/economy/economy-recession-soft-landing.html

• Danske Bank opposes majority, says rupee bulls wrong as record low looms 

https://www-business--standard-com.cdn.ampproject.org/v/s/www.business-standard.com/amp/finance/news/danske-bank-opposes-majority-says-rupee-bulls-wrong-as-record-low-looms-124052300079_1.html?amp_gsa=1&amp_js_v=a9&usqp=mq331AQIUAKwASCAAgM%3D#amp_tf=From%20%251%24s&aoh=17188833671849&referrer=https%3A%2F%2Fwww.google.com&ampshare=https%3A%2F%2Fwww.business-standard.com%2Ffinance%2Fnews%2Fdanske-bank-opposes-majority-says-rupee-bulls-wrong-as-record-low-looms-124052300079_1.html

• Top Forecaster Defies India Rupee Bulls as Record Low Looms

https://www.bloomberg.com/news/articles/2024-05-23/top-forecaster-says-indian-rupee-bulls-wrong-as-record-low-looms?embedded-checkout=true

• Value of 1 USD in INR since 1947

https://www.bankbazaar.com/currency-exchange/historical-value-of-1-usd-in-inr.html

• 1 USD to INR: From 1947 to 2024

https://www.forbesindia.com/article/explainers/1-usd-to-inr-history/88635/1

• Will it be a good year for Indian rupee? Here’s what Goldman Sachs says

https://www.indiatoday.in/business/story/indian-rupee-inr-2024-prediction-outlook-goldman-sachs-analysis-note-2483210-2024-01-02

• Soon You May Be Able To Tip In Rupees In Thailand! RBI, Government Look To Popularise Use Of Indian Currency

https://timesofindia.indiatimes.com/business/india-business/soon-you-may-be-able-to-tip-in-rupees-in-thailand-rbi-government-look-to-popularise-use-of-indian-currency/articleshow/109337256.cms

‍