economy : Why-is-a-rupee-less-valuable-than-a-dollar
Answer by Jai Parimi:
Value of money for two people is not same in rupees itself. Forget dollars and rupees. 🙂
As an illustration, A hundred rupee note can buy a poor man one day of life while the same hundred rupee note cannot buy an ultra rich person his bedtime coffee. Ain't that a fact? 🙂
By establishing that value of money is not equal, let me explain you that the term value of money is very vague. Which value are we speaking about?
Is it the monetary value or the purchasing power value?
For example, if you consider monetary value of a currency,
As of today, USD 1 = INR 60
But, if you consider purchasing power,
As of today, USD 1 = INR 21
Now that we understand value of money is very vague, let us try to compare a dollar and a rupee in terms of their value.
So, to understand the complete picture we need to know what are the factors affecting a currency value. Few of those factors are explained in
There are too many factors affecting the value of each of these ranging from local inflation of a commodity like rice to the international inflation of a commodity like oil subject to regional conflicts and international conflicts.