Question

Why the value of Dollar is more than Rupee?​

Answer 1

bcz of the factors below Dollar is more than Rupee

• ​Trade Deficit:-

India’s imports are much more than its exports, causing a trade imbalance. To avoid depletion of its Forex reserves, India needs to increase its exports and for that it devaluates its currency. (Stated above, with lower value of rupee, Americans can buy much more from India, hence exports increase.)

• Demand and Supply

Since India’s Imports>Exports, there are many people who convert rupees to Dollars. Since there are a lot of people are ready to give their rupee in exchange for dollars, the value of Indian Rupee decreases.

• Capital inflows in the country:

When the rupee is devalued, NRIs tend to send in a lot of money. The IT sector too generates a lot of dollars. Though this capital inflow is not enough to make up for the trade deficits.

:)