07 December 2009
The reason is very simple Ms. Harika, it is based on the Demand and Supply Concept. Dollar has more demand than Rupees, hence, its value is more compared to Rupees. The following is the reason for the increased value of dollar as compared to rupees:
1) India import's more than what it export's to other country.
2) Due to above, the demand for dollar increases, since the importers are required to make payment in dollars.
3) And since our export is less, there is less inflow of foreign currency in India.
CAclubindia
