Why are the value of other currency like rupee flactuating compared to dollar?
- Thread starter Stardom22
- Start date
It is simple, dollar have more demand in the market than rupees. It shows the economic robustness of United States and its versatility. Americans are more self reliant than India.
Sometimes the value of a country's currency is not all about how big their economy is. The dollar is not the most valuable currency in the world but it is the most used.
I think you are wrong because economy is determine by the Gross domestic product. American produce more than what they need as a nation and have surplus. Don't think that size is not an important determinant factor in economy.
China has one of the biggest economies in the world but their currency is not much strong when compared to the u.s. dollar. What do you have to say about that?.
I am from Pakistan and in here we also use the Rupee (Pakistani Rupee). The value of rupee is decreasing in here as Pakistan is facing economical problems.
Many countries' currencies is actually decreasing, i think the dollar has gained more strength. We are facing same issue in my country also.
The dollar is the standard of measurement of currencies and anything that happens in the economies of the United state of America will definitely affect majority of other economies.
Geopolitical events and global market sentiment also play a role in determining the value of the rupee compared to the dollar. For example, if there is a crisis in the Middle East investors may become nervous and shift their investments to the U.S. dollar, causing the the rupee to decline.
I think this is actually true. When something happened to the dollar a lot of other countries' currencies will also be affected.
The stability of the US economy relative to the instability of the economies of other countries would cause the fiat currency to fluctuate against the dollar.
Unfortunately I have not gone into any transaction that is going to get me to exchange Indian currency to dollar which is why I don't have the knowledge on this right now but I believe that it's something that will always be affected by the economy of India.
It is because the external demand for that currency keeps reducing while the country's demand for the dollar keeps increasing. Just make sure the country increases export.
