` Why 1 dollar = 60 rupees and more?

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Ankur Tah-TAX Advisory & Solutions

Why 1 dollar = 60 rupees and more?

This article is about how does dollar effects with Indian Rupee. Basically i am trying to give a little idea about above mentioned factor in very simple way with casual examples.
In this article you found how DOLLAR makes its value more expensive than RUPEE. By this article you can understand on other currency also, like POUND, YEN, TANKA etc etc..

 Click for videoYou can also see my you tube video on that particular topic, link: Click on the picture

Or direct link: https://www.youtube.com/watch?v=kUQXJkijHic

 I am trying to publish this article in three languages eg (click) Bengali, Hindi, English.

So Coming To Topic, we usually hear that, today price of  DOLLAR increased to Rs 62, decreased to Rs 60. Than what is the reason behind that? How DOLLAR becomes higher than RUPEES?

We discuss with few examples:
1st (History): Our Grand Grand Grand Father used to generally deal with Barter system. But this barter system was easily possible in between countries, than what about foreign product?  So its quite impossible to purchase the foreign product through barter system, bcoz other countries may not be interested with barter system. and Vice-verse.
To solve that problem, GOLD and Silver had been introduced in the market to meet the crisis of barter system.(In my following article I will publish that how currency was introduced in  place of GOLD and Silver.)
2nd(details): Suppose, India plans to sell 10000 Kg Rice every year. And USA produce iphone.
Now, India sells those 10000 Kg Rice to USA. Assuming 1$ per Kg Rice, and USA pays $10,000 for 10000 Kg Rice. And in India 1 Kg Rice is valued at Rs 50.
Now India wants to purchase 10000 iphone, but it's too costly. USA asked for $1,000 per i phone, so India will have to pay $10 million(100 lakh). And India have only $1,000.
 what to do???????
 Than INDIA asked USA, "We will pay 10 million rupee against $10 million, is it okay?"

USA says" What we will do with Indian Rupees? in our country Rupee is useless."

INDIA says," Later you will purchase Indian product with that money."

USA says, "We don't need lots of Indian product, we produce our product by ourselves. If you(India) really want to purchase iphone, than you will have to pay more amount of Indian rupee".

INDIA says, "Okay, we will be paying 100 million Rupee against $10 million dollar."

Than USA surveys Indian market.....

USA says,"No waysss..,"We will take price equal to 1000 Kg Rice in India".
1000 Kg Rice @ $1 valued at $1,000, And in India values (10000 iphone X Rs50)= Rs 50,000."

So, 1 pcs i phone valued at 50,000 Rupee in India. So 10000 pcs i phone valued at (10000X50000)= 500 million Rupees.

So, Unwillingly, India has to pay them 500 million  Rupees for 10000 i phones, and USD accepted to be equal to INR 50.

3rd(actual): What we understand on above example, we see India are not able to wish as per his personal demand. But USA can demand as per his wishes. coz USA is only a producer of iphone. 
Above statement is completely for your understanding, you can put any currency insted of DOLLAR and all currencies basic fanda yehi hain.  Later I will describe by what factor and which factors (like GOLD, SILVER etc) may effect currencies.

Latter i will go to the more deeper, and if u have any question please ask, and please give a comment  whether you all are enjoying. Do also let me know whether my article is understandable to you. Your valuable comments makes me motivate.

This a basic factor which i am trying to tell in simple way. Your comments encourage me.

                                             Thank You...


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