Why dollar is 41 rupees?

Question

Why dollar is 41 rupees?

Answer 1

Because the dollar is more valuable than a rupee.

In a floated exchange system the strength of a curency is determined by supply and demand. The more it is demanded and the less in supply the stronger the value is i.e. when you 'buy' dollars the value goes up, when you 'sell' rupees the value goes down and vice versa.

Every day people exchanging money for holidays have very little impact on this, it is the large purchases that have the most impact. When an overseas country buys goods from, for example Australia, it must pay for those goods in AUD and therefore has to 'buy' AUD, causing it to strengthen in value.