Factors That Influence Exchange Rates

Exchange rates are not only important for the people who are trading in the foreign exchange market. Of course, they are a little more invested than you are, but the changes that occur in this sector significantly affect a lot of people. If you have ever purchased a product several times via internet with a different currency then you have certainly noticed a change in the amount which was charged to your account. In the case of small amounts of money you will hardly notice the difference in a few cents, but just imagine that you are dealing with a bigger amount. It is stressful just to think about it.

Have you ever considered how changes in exchange rates may affect you if you are planning to go on holiday abroad? It is hard to accept the fact that your hard-earned money will disappear sooner because of exchange rates and you do not even know why they are changing. Fortunately, you can a quickly fix it. With the help of this excellent infographic you’ll learn all about the factors that affect exchange rates.

Did you know that countries with large public debts are less attractive to foreign investors, due to fears of high inflation and the chance of defaulting? This will decrease the currency’s value. If that sounds too much economically to understand, try going step by step. India has a large public sector debt, with the government owing the Indian private sector a substantial amount of money. This is why India needs to go into external debt. This means owing money other countries. Of course, now the foreign investors will withdraw their funds to avoid financial trouble. This will all lead to decrease in value of the Indian rupee. Find out more interesting information about factors that influence exchange rates in this great infographic.