Foreign Exchange Rates In India

By Author: Nitin Motwani
Total Articles: 11
Comment this article

The dynamics of supply and demand in international markets determine currency exchange rates. Just like the broader international markets, the currency exchange rate in India is unpredictable and full of wild rate fluctuations.

At a time in human evolution when humans danced around fires and lived in caves, there was no money and no coins. People found everything they needed in their immediate vicinity. They hunted for food in the forests, skinned meat with sharpened stones, cooked on open fires again generated by rubbing two stones together and wore clothes made from tree barks and animal skin.

We can hardly do the same now in the modern world! Can we? So, we need money!

Humans did evolve to using the system of bartering one product for another, say you had a cow and I had grain; you wanted grain and I wanted cow; we simply exchanged one for another and that made two happy people. But this system over time was improvised to make coins as representative of the value of certain commodities. The coins were used as ‘payment’ for certain bartered goods and so evolved money.

Now, money has so many ...
... myriad forms (plastic money, commodity money, representative money, gold coins, shares, mutual funds and so on) that sometimes if you ask someone how much money they have in overall assets, they will not be able to answer straight away! They will need to evaluate all their assets (property, shares, gold, investments and many other) in monetary terms in order to reach a figure.

What does all this have to do with FOREX?

Every country has its own currency and that currency has a value that is arrived at through means that are perplexing to most common citizens. It is a job best left to the experts but what does affect all of us is the value of our country’s currency. That value decides what we can buy, how we can buy and how much we can buy!

When you desire a commodity or a service, you need to have the ‘right amount of money’ in order to have that thing; but if you are in a country other than yours or have money in the form of foreign currency, you also need the ‘right kind of money’ if you desire to purchase something.

You will need foreign exchange services in order to acquire the ‘right kind of currency’. But have you realized that you may not always get the ‘right amount of money’. Why? Because the amount will depend entirely on the currency exchange rate you get.

If you are exchanging dollars for rupees you will feel really rich as the dollar is a much stronger currency than the rupee. Obviously, if you are exchanging rupees for dollars, you will feel the opposite. Now, even in the happier scenario of exchanging dollars for rupees, you can get various values for a single dollar at different places. And this is where getting the ‘right amount of money’ comes into the picture.

Due to its large size and volatility, the foreign exchange rate market is generally difficult to predict. Since it is desirable to optimise the potential of whichever currency one wants to trade in, it is best to seek real-time market rates, accurate to the last second. Look for a service provider who can provide the best foreign exchange rates in India.

The author of this article is associated with Bookmyforex.Com, a pioneering website conceived with the long-term vision to use its exclusive tie-ups, large distribution network and the internet to create an organized and customer friendly foreign exchange and remittances market in India.