Indian Rupee Trading

Indian Rupee trading (INR) has seen a marked growth in popularity that has correlated strongly with the rise in Eastern economies. This article provides an overview of trading the INR, how the exchange rate works, the pros & cons of the currency and factors affecting its price. We will also provide some top tips and strategy advice for Indian rupee trading and have compiled a list of the top forex brokers below.

Indian Rupee Trading Brokers

Forex.com are a leading forex broker. Offering the largest range of currency pairs (80+) and some of the tightest spreads in the industry.
NinjaTrader offer Traders Futures and Forex trading. Use Auto-trade algorithmic strategies and configure your own trading platform, and trade at the lowest costs.
Trade with leverage on the FX market.
The leading US trading Exchange. Nadex offer genuine exchange trading to US clients on Binary Options. Fully regulated by the CFTC.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Exinity Trader Pro supports major, minor and exotic forex trading on MT4 and MT5 platforms.
Trade on a handful of the most traded currency pairs with leverage.
Use digital options to take straightforward buy and sell positions on a range of currencies.
Trade on FX pairs with 1:500 leverage.
Zulutrade provide multiple automation and copy trading options across forex, indices, stocks, cryptocurrency and commodities markets
IB Boast a huge market share of global trading. With a minimum deposit of $10,000 however, they remain an option for larger traders only.
One of the largest discount brokers in the US, with a fixed trading commission and access to a large array of trading products and securities
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An Overview Of Indian Rupee Trading

The Indian rupee is used as legal tender for over 1 billion people living in India. In the past decade, India has experienced huge increases in its economy’s growth rate, reaching the position of the fifth largest GDP worldwide. Although the growth in the economy has been strong, the domestic currency has experienced a drop against other main currencies in recent years. However, India’s large workforce and economic growth is an indication that the currency may start to strengthen again.

How Is The INR Exchange Rate Determined?

India has a floating exchange rate system whereby the exchange rate of another currency with the Indian rupee is influenced by multiple market indicators like demand and supply. For example, if demand for the INR increases, its strength will increase as the currency becomes more desirable and scarce.

Likewise, if supply were to increase or demand were to decrease, the currency’s strength would reduce as the market becomes more saturated with the currency in relation to the market’s desire to obtain it.

trading the indian rupee

Pros Of Indian Rupee Trading

Indian rupee trading can be a volatile experience. If buy-sell rates that include the rupee are very variable then profits could be made more quickly for successful trades, particularly if you can make correct predictions and identify important trends.

Trading forex is a much more straightforward process today than it used to be. Nowadays, investors have years of historical data and INR price history to draw upon to make predictions. Moreover, online trading services and automated trading systems are much more accessible and affordable, with more sophisticated technical analysis tools, mobile app support and order execution models available.

Cons Of Indian Rupee Trading

Whilst the volatility of the Indian Rupee can make for large profits, it can also lead to big losses. The quick changes in the currency’s value can make an accurate prediction of trends more difficult and losses more sudden and significant.

Indian rupee trading is not as popular as many other currencies in the foreign exchange market, meaning that brokers often have reduced leverage rates on offer for related pairs. This can limit the profitability of trades for more adventurous investors.

Similarly, the lower interest in trading the INR leads to reduced trading volume and market liquidity. This can impact profits both in terms of greater slippage and wider spreads.

Factors Affecting INR Price

Many factors can affect the value of the currency and anyone involved with Indian rupee trading must watch out for these, both to better inform trend predictions and to exit positions before a wild reversal. The main factors to consider are the political climate, both domestic and international, central bank policy, external risk and economic health.

The GDP growth rate plays a huge role in the dominance of a particular currency and ties in most of the factors listed above. If an economy is growing quickly due to something like a political change, then investors are likely to be interested in that economy. When they invest, they will need to make their investment in the domestic currency meaning the demand for that currency will increase. As an investor on the forex market, if you suspect an influx of investment/economic growth in a particular economy then you could buy the currency whilst it is relatively cheap and then sell it when there is higher demand.

Trading Hours

Trading in the forex market is open 24/5, allowing for all countries and exchanges to get involved during convenient times of the day. That being said, there are often better hours in the day for trading particular currencies and forex pairs. Generally, the times during which the relevant stock exchanges are open is a good time to trade as liquidity and volume are higher, reducing slippage and spreads.Indian rupee trading forex brokers

The Stock Exchange of India is open 09:00 – 17:00 IST (Indian Standard Time), corresponding to 03:30 – 11:30 GMT. These hours will likely be relatively good for most Indian rupee trading pairs. However, the active trading hours in the London and New York sessions, especially when trading GBP/INR or USD/INR, will generally see much better liquidity and volume.

The London session runs from 08:00 to 17:00 GMT and the New York session runs from 14:00 to 22:00 GMT. Therefore, the best times for Indian rupee trading are generally 08:00 to 17:00 GMT, crossing through the end of the Indian stock market hours and hitting the crossover of the London and New York sessions.

Brokers That Support Indian Rupee Trading

If you wish to get involved with Indian rupee trading you will need to find a suitable broker. Most online forex brokers will offer some currency pairs involving the INR, such as EUR/INR and CHF/INR. We have created a list of our top recommended forex brokers here and you can find a detailed guide to comparing options on our forex brokers page. Before opening an account and depositing money anywhere, double-check that the broker in mind definitely offers the currency pairs you are looking for.

Utilising Data Tracking Tools

Indian rupee trading is much like other forms of forex, securities and derivatives trading in that tracking, analysis and educational tools are invaluable resources to investors of all experience levels. Carefully consider different charting options and timeframes, indicators, signals services and market analysis services to try to best predict the price movements of the INR. You should also make use of market trackers, forecasts, expert tips and educational videos and courses to try to get the most out of your trading experience.

Final Word On Indian Rupee Trading

Indian rupee trading allows investors to speculate upon the comparative strength of the INR and, indirectly, the Indian economy as a whole. The technological advancements of recent years have made the process much more accessible and straightforward than it once was, so retail traders from across the world can get involved. The currency is not one of the most popularly traded, so it suffers from reduced liquidity compared to some other major currencies, though the volatility this brings can be an attractive prospect for seasoned traders. To get started, simply open an account with a forex broker that offers currency pairs involving the INR and begin.

FAQs

What Is The Indian Rupee?

The Indian rupee (INR) is the official currency of India and exists as legal tender for more than one billion people. The currency is a managed-floating one, with exchange rates influenced by market powers like supply and demand, with the central bank trading some rupees to better their own interests.

Why Should I Trade The Indian Rupee?

Indian rupee trading can be volatile, which means successful trades could make quicker, more significant profits. Additionally, forex trading is much more accessible than it once was, so retail investors can easily access online brokers, trading charts and analysis tools.

What Strategy Should I Use When Trading The Indian Rupee?

There is no one best strategy for Indian rupee trading, or indeed any form of trading, as the markets are so unpredictable and volatile. However, successful traders are often those who are rigorous with their risk management and pay close attention to both fundamental and technical analysis, making use of historical data and useful tools. A more in-depth guide to trading strategies can be found here.

What Factors Affect The Price Of The Indian Rupee?

Many factors can affect the price of the INR, and any investors involved with Indian rupee trading should keep a close eye on them. The most noteworthy ones include central bank policy, economic health, GDP growth and the political climate.

Does India Use The Gold Standard?

India got rid of the gold standard in 1993 for a managed floating regime, whereby the currency is floated against others in the world but the central bank purchases some INR to moderately influence exchange rates.