Who Decides Currency rate of the Country..?
 

Hello Friends,

Please tell me, Who Decides Currency rate of the Country..?

If the demand for dollars increases, the value of dollar will appreciate. As the quotation for Rs/$ is a two way quote (that is, the price of one dollar is quoted in terms of how much rupees it takes to buy one dollar), an appreciation in the value of dollar would automatically mean a depreciation in Indian rupee and vice-versa.

For example, if rupee depreciates, a dollar which once cost Rs. 47 would cost, say, Rs. 50. In essence, the value of dollar has risen and the buying power of rupee has gone down.

Some countries may decide to use a pegged exchange rate that is set and maintained artificially by the government. This rate will not fluctuate intraday, and may be reset on particular dates known as revaluation dates. Governments of emerging market countries often do this to create stability in the value of their currencies.