What Causes the Fluctuations in the Currency Exchange Rates?

Having a good understanding about the currency exchange rates is very important for any big business, currency trader, investor as well as vacationer. There are various factors which causes the Currency Exchange in Greater Noida to fluctuate on a continuous basis.

The top factors are-

• Demand and supply factors - The currency is bought and sold on a continuous basis. Like any other product or service, the demand and supply factors affect its prices as well.
• Political stability of the country - The currency of any country is issued by its government. Therefore, for any currency to retain its value it is important for the government of that country to be strong. The countries whose futures are uncertain often have much weaker currencies. This is because the traders do not like investing in currencies which might make losses for them in the future and so as the demand falls, the price of the currency also drops.
• Economic strength of the country - A country with a stable government as well as economy has a stronger currency. An economy which is lagging does not attract the investors because of which the investments go down all the more. This drops the value of the currency even more.
• Inflation - Inflation is the general increase in prices. When the country has low inflation, its value increases and when the inflation is high, the value of the currency drops.
• Interest rates - When the central bank of any country increases the interest rates, the lenders get a higher return on the investments made by them. Thus, high interest rates increase the value of the currency since more and more people demand the same.
• Public debt - It is the debt incurred by the government of a country. Large amount of debts result in inflation as the government prints more money to repay its debt. And so, high inflation results in lower value of the currency.
• Trade balance - Balance of trade is the different of country’s import and export. In case of trade deficit, the value of the currency goes down while in case of trade surplus, the value of the currency goes up.

Apart from these unemployment, quantitative easing and growth forecasts also play major roles in determining the currency exchange rate of currencies. Currencykart is the Best Currency Exchange in Ghaziabad which gives only the best currency exchange rates possible.

CurrencyKart is a leading online platform for foreign currency exchange. We specialize in providing fast and efficient forex exchange services including Prepaid Forex cards, traveler’s cheques, foreign currencies and demand drafts.