<p>I will answer your question from the economic point of view, not financial. Your question can be understood from several differents positions. Im from Argentina and nowadays Argentina has devaluated the money nearly 50% agains USA dollar. When I analize why, it comes clearly when I see macroeconomics data. Speaking about INDIA, in general terms the relation Country Money/North American Dollar is explained economically with the macroeconomics equilibium result. Lets see what we have in India. The GDP per capita is low, as you can see in the image, meaning that the value added per capita is poor against USA. You can imagine like you do a simple job, may be Rural job, against USA (industrial work) . The Debt (% GDP) is near 68% (think that as you have an important DEBT to attend annually. The Debt Per Capita is near $1183 dollars, so you can imagine that you have that debt. Your Education Expense (% GDP) is 14%, that number is not so great if you want change the economic structural problem and economic development. Health expenditure is near 5%, that is low, so you may be dont have a huge life expectancy, in fact is 68 years!. People in your country tends to Emigrate rather than inmigrate, so imagine that you dont like to much live in India. Each marriage has 2.33 sons and you have a tremendous amount of people to feed (2.400 millons or persons). There is more, you spend the money buying GUNS more than EDUCATION, your Defense Spending %GDP is 14% (very big) and ending, your imports are bigger than your export so you spend more money than you should. </p>

<p><a href="https://i.sstatic.net/iOGDj.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/iOGDj.png" alt="enter image description here"></a></p>

<p>As a conclution, India´s value added is low, so the income is low, India spend few in education and Health but too much in military stuff. India has debt and Buy (gold and crude petroleum) more than sells (diamonds, refined oil). If you have an expensive dollar your petroleum will be more expensive. The value of a Rupia agains USA Dollar is calculated by the Central Bank of India, and it is not easy to explain because it has a complex macroeconomic impact and reasons, but, in general, it needs to be one value that maximize the Indian macroeconomics indicators and gives an improvement trend for the society. </p>

<p><a href="https://i.sstatic.net/prRKa.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/prRKa.png" alt="enter image description here"></a> </p>

CC BY-SA 4.0
2018-09-10T12:12:48.617Z
2018-09-10T12:12:48.617Z
Dlorko
<p>How is the currency value estimated? Why India has lowest prices to dollar? For example if you buy bread in India it will cost you 1 dollar and in USA 5 dollars</p>

CC BY-SA 4.0
2018-09-15T23:37:01.147Z
If you are asking, why some currencies have better buying power compared to other currencies, then this question becomes very broad for the scope of the site (and also a bit unclear). Are we concerned about how monetary/fiscal policy affects the currency? Determinants of the exchange rate between the two currencies? A question like this needs more elaboration
Kitsune Cavalry
<macroeconomics>
On what does currency value depend
Филиппов Артём
# On what does currency value depend

(Asked by: username_0 on 2018-09-10)

How is the currency value estimated? Why India has lowest prices to dollar? For example if you buy bread in India it will cost you 1 dollar and in USA 5 dollars

**Tags:** macroeconomics
> **Comments:**
> **username_1**: If you are asking, why some currencies have better buying power compared to other currencies, then this question becomes very broad for the scope of the site (and also a bit unclear). Are we concerned about how monetary/fiscal policy affects the currency? Determinants of the exchange rate between the two currencies? A question like this needs more elaboration  

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## 1 answers

### Answer by username_2 on 2018-09-10. Score: 0

I will answer your question from the economic point of view, not financial. Your question can be understood from several differents positions. Im from Argentina and nowadays Argentina has devaluated the money nearly 50% agains USA dollar. When I analize why, it comes clearly when I see macroeconomics data. Speaking about INDIA, in general terms the relation Country Money/North American Dollar is explained economically with the macroeconomics equilibium result. Lets see what we have in India. The GDP per capita is low, as you can see in the image, meaning that the value added per capita is poor against USA. You can imagine like you do a simple job, may be Rural job, against USA (industrial work) . The Debt (% GDP) is near 68% (think that as you have an important DEBT to attend annually. The Debt Per Capita is near $1183 dollars, so you can imagine that you have that debt. Your Education Expense (% GDP) is 14%, that number is not so great if you want change the economic structural problem and economic development. Health expenditure is near 5%, that is low, so you may be dont have a huge life expectancy, in fact is 68 years!. People in your country tends to Emigrate rather than inmigrate, so imagine that you dont like to much live in India. Each marriage has 2.33 sons and you have a tremendous amount of people to feed (2.400 millons or persons). There is more, you spend the money buying GUNS more than EDUCATION, your Defense Spending %GDP is 14% (very big) and ending, your imports are bigger than your export so you spend more money than you should.

[![enter image description here](https://i.sstatic.net/iOGDj.png)](https://i.sstatic.net/iOGDj.png)

As a conclution, India´s value added is low, so the income is low, India spend few in education and Health but too much in military stuff. India has debt and Buy (gold and crude petroleum) more than sells (diamonds, refined oil). If you have an expensive dollar your petroleum will be more expensive. The value of a Rupia agains USA Dollar is calculated by the Central Bank of India, and it is not easy to explain because it has a complex macroeconomic impact and reasons, but, in general, it needs to be one value that maximize the Indian macroeconomics indicators and gives an improvement trend for the society.

[![enter image description here](https://i.sstatic.net/prRKa.png)](https://i.sstatic.net/prRKa.png)


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