Determination of exchange rate between the Indian rupee and us dollar

The exchange rate is called as the rate at which the currency of a country is purchased and sold for the currency of a particular foreign country. For example, the rate at which Indian rupee is exchanged for the US dollar is called as the exchange rate of the Indian rupee with that of the US dollar. This rate of exchange of the rupee against the US dollar is determined by the demand and supply of the US dollar in our country.  It is worth knowing that the US dollar is primarily demanded by importers, FIIs and also demanded for the FDI. FIIs put their money in the stock market of the domestic market while FDI is the capital which is invested in the companies of the domestic country. The supply or earning of dollar comes mainly from the exports of goods and service and the inflow of remittances by the Non-Resident Indians (NRIs). That is why when the importers demand more of the dollars for the international payments than their supply, the rupee weakens vis-à-vis dollar. Consequently, the value of Indian rupee falls down against the US Dollar (US$).

  • The Indian rupee appreciated this week by 0.23 paisa gain compared with previous week close.
  • Last week Indian rupee closed at ₹71.14 with a gain of 0.08 paisa
  • This week on Friday closed rupee closed at ₹70.91 with loss of 0.19 paisa.
  • Highest gain 0.50 paisa Thursday and highest fall 0.19 paisa on Friday.

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