Ufyukyu

.everyoneloves__top-leaderboard:empty,.everyoneloves__mid-leaderboard:empty{ margin-bottom:0; } up vote 21 down vote favorite 6 I was reading about how the exchange rates are fixed. I understand that demand and supply decide the exchange rate but how exactly is it done and by whom? For example, consider US and India. (https://www.quora.com/Where-and-how-are-exchange-rates-determined) When it comes to any currency, say US dollars, Demand for the currency exists due to the following reasons: Import of goods and services from the USA Direct purchases made in the USA by Indian tourists Foreign investment by Indians in the USA Speculative trading by Indians Payment of international loans Gifts and grants to the rest of the world A currency(USD) is in supply due to the following reasons: Export of I