Now that you're exporting solar kits into the Indian market, you've been watching the dollar's exchange rate against the Indian rupee. Currently, $1 is worth 47 rupees. What do you hope the exchange rate is tomorrow?

Question

Titan

Business

30 October, 11:55

Now that you're exporting solar kits into the Indian market, you've been watching the dollar's exchange rate against the Indian rupee. Currently, $1 is worth 47 rupees. What do you hope the exchange rate is tomorrow?

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Answers (1)

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Orlando Kaufman · Answer 1

Hope it will be worth less

Explanation:

Exchange rate is the rate at which one countrie's currency can be exchanged for another. In international trade this is an important consideration because if one buys when the rate is low and sells at high rate he will be making a loss and vice versa.

In this case the exchange rate is $1 to 47 rupees. If the dollar grows stronger than the rupee it will cost more ruppes to buy a dollar, and so the solar panels will have to cost more to break even.

If the dollar grows weak against rupee less rupees will be required to buy the dollar, so the solar panels can be priced lower to break even. This will lead to more customers and bigger profit margin.