How to decide exchange rate of Rupee vs Doller
The exchange rate between Indian Rupee (INR) and US Dollar (USD) is determined by the foreign exchange market, which is a decentralized global market where currencies are traded 24 hours a day, 5 days a week. The exchange rate represents the price at which one currency can be exchanged for another currency.
The exchange rate is determined by the supply and demand of the two currencies in the foreign exchange market. If there is high demand for USD and low supply of USD in the market, the value of USD will increase relative to INR and the exchange rate will go up. On the other hand, if there is high supply of USD and low demand for USD in the market, the value of USD will decrease relative to INR and the exchange rate will go down.
Central banks also play a role in determining the exchange rate by managing their countries' monetary policies, such as adjusting interest rates, which can affect the demand for their currency. In addition, economic and political events such as inflation, trade policies, and geopolitical tensions can also impact the exchange rate.
In summary, the exchange rate between INR and USD is determined by the supply and demand of the two currencies in the foreign exchange market, as well as by various economic and political factors. Therefore, the exchange rate can fluctuate over time and may be influenced by a wide range of factors