Last Update: July 14th, 2021

The base currency (AUD) stands for the Australian dollar, which is also known as the Aussie dollar or the Aussie. The AUD replaced the Australian pound in 1966. In 2016, the currency had been in circulation for 50 years. However, the Australian dollar is the official currency in Australia and several independent countries and regions in the South Pacific, such as Papua New Guinea, Christmas Island, Cocos Islands, Nauru, Tuvalu, and Norfolk Island.

The Australian dollar was authorized as the free-floating currency in 1983. However, the reason for its popularity among traders could be associated with several factors related to geology, geography, and government policy. It is also worth mentioning that Australia is one of the world’s richest countries in terms of natural resources, including metals, coal, diamonds, meat, and wool.

On the other hand, the Indian rupee (quote currency) is India’s national currency, which is also known as the INR currency. However, the INR is usually represented with the symbol ₹. The Indian rupee (INR) derives its name from the rupiya, a silver coin first issued by Sultan Sher Shah Suri in the 16th century. For the time being, the issuance of the currency is controlled by the Reserve Bank of India. Managing currency in India could be considered as one of the most important tasks of the Reserve Bank of India. Moreover, India’s reserve bank also plays an important part in the Development Strategy of the Government of India, issues statements, and decides on the interest rates of the country.

From the historical view, the new rupee sign (₹) was officially approved in 2010. D. Udaya Kumar invented it, and it was derived from the combination of the Devanagari consonant “र” (ra) and the Latin capital letter “R” without its vertical bar (similar to the R rotunda). The first series of coins with the new rupee sign began on 8 July 2011. Before that, India used “₨” and “Re” as the symbols for multiple rupees and one rupee.

While talking about the coins, let me remind you that India’s coins are issued in denominations of 50 paise, one rupee, two rupees, five rupees, and ten rupees. Hence, the paise is 1/100th of a rupee. Coins worth 50 paise are called small coins, while coins equal or above one rupee are known as rupee coins.

At the Banknotes front, the paper currency or banknotes in India are issued in denominations of 5, 10, 20, 50, 100, 500, and 2,000 rupees. It is worth mentioning that the denominations are printed in 15 languages on the reverse side of paper rupees. On the front side, the denominations are printed in Hindi and English.

Normally, India’s banknotes are updated with new designs, including distinct differences from the old Mahatma Gandhi Series of banknotes to the new ones of the same name. The notes show various themes of India’s rich culture.

What is AUD/INR (Australian Dollar/ Indian Rupee)?

One currency is always quoted against the other as the currencies are traded in pairs. Thus, the AUD/INR currency pair represents the Australian dollar trading versus the Indian rupee. In this case, the first currency (AUD) is the base, and the second (INR) is the quote currency.

Major Factors that Influence the AUD/INR Currency Pair

The AUD/INR currency pair value is mainly affected by geopolitical and global Sentiment, like many emerging market currencies. As the foreign players have been withdrawing from the Indian equity market, which contributed to the fall of the Indian rupee. Across the pond, the INR currency has a strong correlation with the crude oil prices as WTI crude accounts for a significant portion of India’s overall imports. Thus, the rise in the price of crude oil hurts the economy. If WTI crude oil prices rise further, it will not only impact the rupee’s stability and the rise in stock markets but may also produce an inflationary effect.

The Australian Dollar(AUD) currency value is mainly affected by several factors such as Interest rate differentials, Commodity prices, Purchasing power parity, Government credit ratings, and Sentiment and speculation.

Current AUD/INR Price: $

Historical Data Table:

AUD/INR Historical Price Data

Monthly Change

Factors impacting AUD/INR Prices:

The value of an INR currency depends on key factors that influence the economy such as imports and exports, employment, inflation, interest rates, trade deficit, growth rate, the performance of equity markets, foreign exchange reserves, foreign investment inflows, macroeconomic policies, banking capital, commodity prices, and geopolitical conditions.

It is worth mentioning that the Income levels broadly influence INR currencies through consumer spending. When incomes rise, people spend more. However, the higher demand for imported goods tends to increase the demand for foreign currencies and, thus, undermine the local currency.

Interest Rates:

As we already mentioned, the higher interest rates in an economy tend to draw foreign investment, increasing the demand and value of the home currency. Likewise, lower interest rates tend to undermine exchange rates. By raising interest rates, the central bank can lower the demand for such goods, leading to pressure on prices.

Likewise, the RBI controls the Indian rupee’s value with different tools, including controlling its supply in the market and, thus, making it cheap or expensive.

Let me discuss some ways through which the RBI controls the movement of the Indian rupee, the first one would be (change in interest rates), and then relaxation or tightening of rules for fund flows, tweaking the cash reserve ratio (the proportion of money banks have to keep with the central bank) and selling or buying dollars in the open market,” says Brahmbhatt of Alpari.

Across the pond, one of the major drivers behind changes in the AUD’s value is the interest rate differential. The interest rate differential is the relative benefit an investor receives from investing in one country’s assets over the other. If interest rates in Australia are 1.50%, but are higher in the US at 2.40%, then an investor will get a high return by buying US assets. But this method tends to undermine the value of the AUD, as investors sell AUDs and purchase US dollars to invest in US assets.

Crude Oil:

The WTI Crude oil prices could also be considered one of the major factors affecting the Indian rupee (INR) currency prices as crude accounts for a significant portion of India’s overall imports. Thus, the rise in the price of crude oil hurts the economy. If WTI crude oil prices rise further, it will not only impact the rupee’s stability and the rise in stock markets but may also produce an inflationary effect.

Economic Data:

The economic data such as Consumer Price Index (CPI), Gross Domestic Product (GDP), Trade Balance, Retail Sales, Labour Force Survey Consumer Price Index, and Industrial Price Index have a great influence on USD/INR prices. These data are important to understand the stock market and especially the direction of the INR.

FOREX DEMAND:

The international trade and movement of people is growing sharply, no currency is acceptable all over the world. Whether you go for higher studies to the United States or fly to Rio for a holiday, you will have to pay for services and goods in their currency. Besides, you have to pay in foreign exchange while doing online shopping from international stores.

Thus, the foreign exchange rate for converting currencies depends on the market scenario and the exchange rate being followed by the country’s banks. Floating exchange rates, or flexible exchange rates, are determined by market forces without central governments’ active intervention. For example, due to heavy imports, the rupee’s supply may go up, and its value falls. On the contrary, when exports rise and dollar inflows are high, the rupee ten to underpin.

Sentiment and speculation:

The Australian dollar is considered one of the most popular growth and risk proxy in global financial markets, usually used as a barometer, and trading device, to benefit from short-term changes in sentiment towards global economic growth market risk. Therefore, when there is a bullish bias in the market, the Australian dollar will often climb, conversely if there is a prevailing pessimism, the AUD will often drop.