As I watch daily news rupee rising and dollar down. How is it evaluated?
2007-10-28 02:54:17 · 3 answers · asked by prakash k 2 in Business & Finance ➔ Other - Business & Finance
quite agreed hottotro... its a bit complicated thing specially for me who doesn't knw anything about it. but curious to know.
2007-10-28 05:06:00 · update #1
There are different ways in which the forex rate of a country can be determined or fixed. Typically in most free market economies, the currency price fluctuates due to the demand and supply considerations. But, some countries can also decide not to let their currencies fluctuate and therefore they "peg" the currency to a base currency. For example, the Chinese Yuan was pegged to the US dollar at 25. So, 25 Chinese Yuan would always earn 1 US dollar, in such a scenario and if US dollar falls, the Chinese Yuan would also fall to the same % etc. A local example would be I believe that the Nepali Rupee is pegged to the Indian Rupee. ..
I am not sure if these 2 are the only ways the countries value their currencies..
If you want more details on how in a free market economy the currency price changes, visit the article below:
http://www.investopedia.com/articles/trading/04/031704.asp
2007-10-28 19:21:18 · answer #1 · answered by Ananth Naag 2 · 0⤊ 0⤋
I believe its the free market. Buyers suggest a price, sellers suggest a price. If they agree, that's the current price. Its a large scale negotiation. Its like the stock market.
2007-10-28 10:00:41 · answer #2 · answered by hottotrot1_usa 7 · 0⤊ 0⤋
when the dollar is down, is when we get less business from foreign countries
2007-10-28 10:00:50 · answer #3 · answered by Anonymous · 0⤊ 0⤋