How is the exchange rate of a currency determined i.e how do we determine the value of Rupee vs doll

If the value of Muritian Rupee= 1.5 Indian Rupee, what does this mean. Also if we have so much poverty why cant we print more money.

How is the exchange rate of a currency determined i.e how do we determine the value of Rupee vs dollar?

There are dozens of web pages that will give you exchange rates between any two hard currencies. I%26#039;ve included one (below).

Todays closing rate had the U.S dollar worth 44.14 Indian Rupees. If you have 1000 rupees you can exchange it for approximately $22.66 USD, (less any fee from the money-changing institution).

Printing more money without any underlying change in the amount of goods and services available for purchase just causes price inflation. It certainly doesn%26#039;t cure poverty.

For example, suppose my island has only coconuts to sell (and eat), and there are only 1000 of them. There are 2000 residents each one with 5 %26quot;island rupees%26quot;. The value of the coconuts (assuming there is demand for all 1000) is 10 island Rupees per coconut because the money supply is 10,000. Everyone has to share a coconut with one other person because they can only afford 1/2.

Now everyone complains that nobody has enough money to afford one whole coconut, so you print and distribute 10,000 more island Rupees. What happens? The price goes up to 20 island Rupees per coconut, and you are just as poor as you were before, even though you have twice as much money!

Better to teach people how to catch fish or grow more coconuts. The additional food supply, competing for the same number of island Rupees will drive down the price. The best fishermen can sell their fish and have even MORE island Rupees...enough to buy even MORE coconuts.

It%26#039;s the magic of free enterprise, work incentives and market forces.