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  • Why and how is 1 dollar 48 rupees?

    Red Hawk

    Member

    Updated: Oct 27, 2024
    Views: 1.8K
    Hello .
    Actually this question was asked by my brother.. I couldn't answer it.. Neither could he correctly.. He just shared with me what he knew.. So if anyone knew this procedure for calculating the value of one country's currency with respect to another please post it here..
    I heard that this is by the amount of gold reserve that the government has.. If it is true, then give us the full details..
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Replies

  • shalini_goel14

    Member • Jun 18, 2009

    I guess it depends on supply and demand. The amount of dollars Indian government has as forex. If India wants the value of dollars to go down , it should bring all US dollar holdings should be exchanged with other currencies.

    PS: Correct me if anything wrong.
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  • arihant007

    Member • Jul 18, 2009

    Ok here is the basic idea of how currency value is determined. After the gold standard and the US dollar standard fell, the world entered an age of the floating currency exchange. This means that everyday a nations currency might be more valuable or less valuable than the day before. What determines the fluxuations? Buyers. Countries all over the world purchase other countries currencies, which determines the value. The American Dollar is strong because many many countries buy a whole lot of US Dollars. If investors and buyers decide to stop buying US Dollars, then the value of the US dollar would drop significantly.

    Hope i made things clear..

    😀
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  • ukanth19

    Member • Jul 18, 2009

    its not about like u think.Indian government buy a money machine from US.They not until give the bal amount. And take many loan from frm many bank. Day by day value of rupee decreases
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  • arihant007

    Member • Jul 18, 2009

    ukanth19
    its not about like u think.Indian government buy a money machine from US.They not until give the bal amount. And take many loan from frm many bank. Day by day value of rupee decreases
    You dint get the point, dint you?

    Now i ll ask you in your own way.

    How did that rupee decrease? 😛
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  • ms_cs

    Member • Jul 18, 2009

    arihant007
    Ok here is the basic idea of how currency value is determined. After the gold standard and the US dollar standard fell, the world entered an age of the floating currency exchange. This means that everyday a nations currency might be more valuable or less valuable than the day before. What determines the fluxuations? Buyers. Countries all over the world purchase other countries currencies, which determines the value. The American Dollar is strong because many many countries buy a whole lot of US Dollars. If investors and buyers decide to stop buying US Dollars, then the value of the US dollar would drop significantly.

    Hope i made things clear..

    😀
    Interesting !

    But I dont understand one thing. Can you elaborate why american dollar is strong?
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  • ukanth19

    Member • Jul 18, 2009

    why buyers or investors buy us dollars only over rupee?
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  • ukanth19

    Member • Jul 18, 2009

    Remember that India imports three-fourths of its oil. As the value of dollar goes down importing oil becomes cheaper. Since oil prices are directly related to rise in prices of other goods and commodities in India, their prices will also fall down
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  • vishnu priya

    Member • Jul 18, 2009

    I dont know on what basis it is being calculated but you can know the equivalent of any currency from this site::#-Link-Snipped-#
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  • wassup

    Member • Jul 18, 2009

    There is no simple answer to this one ! There are many factors that determine the exchange rate between two countries, like export,import, inflation,.... The number are usually derived from the amount of buying and selling that happens between two countries. Now lets take US and India for example. To start with say India has 100 Rs = ($2), and you It buys something from US for $1. Now US is richer by $1/- and India is poorer by 50/-. So the price of INR goes up by 100% . Same thing happens with Inflation. Say if the prices in US are low and in India prices of the same goods are high. India becomes poorer compared to US, hence the INR to $ price goes up.

    So if you want to INR prices to be stronger, buy Indian made stuff and sell a lot more Indian made stuff to US 😀 So if you buy TATA Indigo, Indian becomes richer, and if you buy FORD, India becomes poorer ! As simple as that...
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  • arihant007

    Member • Jul 19, 2009

    ms_cs
    Interesting !

    But I dont understand one thing. Can you elaborate why american dollar is strong?
    Most of the businesses across the world are done with the United States. Every time a transaction is done, the amount is paid in USD currency. Suppose I buy PS2 from USA, then I have to pay them in their currency (USD). To do so, I have to purchase USD currency, in exchange to our rupee. The seller sells us the USD currency in high value, we purchase it. And thus, the Dollar becomes strong.

    So likewise, if more countries buy things from India and pay money to our country, then very soon the value of rupee will also increase.!!

    This was just a very small example which I ve given. There are many factors also which determine the rates.

    Also, remember each time you purchase foreign brand, the value of our currency decreases, cause we are paying the foreign countries.

    Hope I ' ve made it clear to all. It's just basic trading. 😉

    😁
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  • jhbalaji

    Member • Jul 26, 2009

    Read below to know in detail about it
    #-Link-Snipped-#
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  • jhbalaji

    Member • Aug 8, 2009

    Hope you would have understood now mate... 😀
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