why is country's exchange rate calculated w.r.t dollar
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Currencies have different value because the Gross Domestic Product/inflation/growth are different for each countries. The micro economy differs of each country, hence it is important to understand the value of each country through it currency.
There are various factors that determine the value of the currency. Every currency is denominated against dollar. Why so, is whole another story. So the value of currency majorly depends on demand and supply of that currency. Factors that affect demand and supply of currency are multiple:
Economy growth. 2.Inflation. 3.Governmental policies
and so on and so forth. Also these factors affect the dollars which directly affects the valuation of rupee or any other standard currency.
There are various factors that determine the value of the currency. Every currency is denominated against dollar. Why so, is whole another story. So the value of currency majorly depends on demand and supply of that currency. Factors that affect demand and supply of currency are multiple:
Economy growth. 2.Inflation. 3.Governmental policies
and so on and so forth. Also these factors affect the dollars which directly affects the valuation of rupee or any other standard currency.
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