Finance, Forex and Investments

why are the values of currencies different for different countries?

it is found that in each and every country in the world has its own currencies which have different rates.for example one US Dollar equals to 45 indian rupees approximately.how can one determine that? if one country ,claiming to be sovereign ,plans to revaluate its own currency and wants to make it equal with that of the US, is that possible? if one renegade state decides not to honour intrnational currency obligations, what is going to happen?

Public Comments

1. every country's economy is different, so therefore the value of their money is different. A country with a really poor economy has a high rate of money (things 'cost' more, say 500 units of money) than a country with a better economy (things 'cost' less, say maybe only 50 units of money). Hope that this helps!
2. Supply and Demand of a country's currency in the world markets. Also, since most developed countries float their currency, currency trading determines a lot of that. This causes people to use their emotions and drive currency prices up and down. Some countries might peg their currency to another one, or might peg it to gold or something. This has proven to be difficult in our current world economic markets. The daily or monthly exchange rates determine it. Depending on where you exchange it, they might go with daily or monthly rate. Most financial websites or newspapers list the current exchange rates for various currencies.