What is an Exchange Rate?
An exchange rate is the price of one currency in terms of another. If USD/INR is 84, one US dollar buys ₹84. Rates are quoted in pairs — the base currency and the quote currency.
Exchange rates are set by the global foreign exchange market, where banks, companies, and traders buy and sell currencies 24 hours a day, five days a week.
What Drives Exchange Rates?
Rates move with supply and demand. A country with strong exports, high interest rates, or heavy foreign investment sees its currency appreciate; political uncertainty or high inflation pushes it down.
The RBI intervenes in the rupee market to prevent excessive volatility, but the rupee still fluctuates daily against the dollar, euro, and other major currencies.
Beware the Spread
The rate you see online is the interbank rate. When you actually exchange money — at a bank, airport counter, or money changer — you get a less favorable rate because of the buy-sell spread and fees.
For remittances and travel, compare the all-in cost (rate plus fees) across providers. A difference of even 0.5% on a large transfer is significant.
Convert Accurately
Whether you're planning a trip, pricing imports, or sending money home, accurate conversion matters. Rounding errors on large amounts can cost real money.
Use our Currency converter for instant, accurate conversions between major world currencies, and check the rate again close to your actual transaction date.