Why US dollar has more value then indian rupees?
what happens if US dollar comes down?
Answer:
The value of US dollar is at a real low. From Rs. 55 in 2005 to Rs. 40 in 2007, a fall by Rs 15 for the US.
If US dollar comes down, trade in Euro's. Its safe and doesnt fluctuate as much as the US $
us dollar is worth more, because there are more printed and circulating the country. if there were more us dollars, then their value would decrease in the world's economy
it just is.
As It shows that US is developed country.
An interesting question ..? (price inflation maybe )
But a more important question, is if the - purchasing power -between - $ and Rupee ..etc, is higher or better.
Most goods and Assets are cheaper in India, for example.
Hmm. I'm not actually sure, but I guess that it has something to do with how many of the bills are circulating. New Zealand (where I live) bills are worth less than US bills.
Value of any currency is determined by its buying power in the market.If there are more than 100 yens in a dollar,it does not mean that value of dollar is more than Japanese currency.It means that 100 yens can buy same amount of commodity as one dollar.If value of dollar comes down against rupees,our export to other countries will cost more to them in dollars and import will cost less in rupees to us.
the value of a currency is determined by the exchange rate, which is a function of the demand for that currency in international monetary markets.
the demand for any currency is made up of speculative demand and the underlying demand for good and services that can be purchased in that currency. for example, if you want buy something from a us company, you will have to pay in us$, therefore you generate a demand for that currency. as there is only a fixed amount of currency at any point in time this affects the price, that is the exchange rates.
speculative demand is mainly from two sources. there are currency trades who generate profits by trading currency, same as shares. the other is governments accumulating currency for strategic reserves (to buy food, oil and weapons or) to affect value of their currency.
so to answer your question, the us$ has a higher exchange rate, is more valuable as it is in higher demand than Indian rupees. the main reason for this is speculative, where by governments over the last decade have built massive reserves of us$. this particularly true of the chinese, as this helps them maintain pegging to the us$.
A country's money value is decided based on the Foreign Exchange Reserves and strength of the Global Economic Trade
Global Economic Trade of USA is several times stronger than India
Hence USD is more value than indian Rupees
When US dollar comes down nothing happens in India except we can buy Dollars little cheaper than before
When our Strength in Global Trades improves we feel the impact in India by increase in Foreign Exchange Reserve and improve Economy
In short Every country should try for incresed value for their currenvy by way of increase overseas trade rather than expecting other's fall
The value on any currency depends upon the market value of it. It like a share market ..
Thats because indians like to print money. The more you print the less valuable each bill is - also see Mugabe.
The value of each bill does not reflect on the strength of the economy - the total value of all the bills do.
The recent fall in the US dollar is a reaction to the refusal by China to let its currency float.
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