Exchange Rate Between Indian Rupee And Us Dollar
The exchange rate between Indian Rupee (INR) and US Dollar (USD) is a topic of interest for many people who are involved in international trade and finance. India is a growing economy, and its currency is an important one in the global market. Therefore, understanding the exchange rate between INR and USD is crucial for businesses and individuals who are involved in financial transactions that involve these two currencies.
What is Exchange Rate?
Exchange rate is the value of one currency in relation to another currency. It is the rate at which one currency can be exchanged for another. The exchange rate between INR and USD tells us how much INR is needed to buy one USD or how much USD is needed to buy one INR.
How is Exchange Rate Determined?
The exchange rate between INR and USD is determined by the forces of demand and supply in the foreign exchange market. If the demand for USD is high, then the exchange rate will increase, which means that more INR will be needed to buy one USD. Conversely, if the demand for INR is high, then the exchange rate will decrease, which means that fewer INR will be needed to buy one USD.
Factors Affecting Exchange Rate
There are several factors that can affect the exchange rate between INR and USD. Some of these factors include:
- Economic policies of the government
- Inflation rate
- Interest rates
- Trade balance
- Political stability
- Global economic conditions
Current Exchange Rate
As of August 2021, the exchange rate between INR and USD is approximately 74 INR per USD. This means that one USD can be exchanged for 74 INR. However, the exchange rate is subject to change based on the factors mentioned above.
Impact of Exchange Rate on International Trade
The exchange rate between INR and USD has a significant impact on international trade between India and the United States. A high exchange rate means that Indian goods become more expensive for US buyers, which can lead to a decrease in demand for Indian goods. Conversely, a low exchange rate means that Indian goods become cheaper for US buyers, which can lead to an increase in demand for Indian goods. Therefore, businesses that are involved in international trade need to keep a close eye on the exchange rate between these two currencies.
Conclusion
The exchange rate between INR and USD is an important factor that affects the economy of India and the United States. It is determined by the forces of demand and supply in the foreign exchange market and is influenced by various factors. Understanding the exchange rate between INR and USD is crucial for businesses and individuals who are involved in financial transactions that involve these two currencies.