In this blog, we have mentioned some of the factors that can impact foreign currency exchange rates and determine how expensive or cost-effective your remittance to India will be.
• Inflation rate fluctuations can cause changes in the money to India exchange rates. If your country has a low inflation rate than another country, you will get to see an appreciation in the value of your currency. When inflation is low, rates of goods increase at a slow rate. But if the inflation rate in your country is high, the value of your currency will depreciate.
• Value of your currency will also get changed due to interest rates. There is a co-relation between interest rates, forex rates and inflation. Your country’s currency can appreciate if there is increase in interest rates. This is because high interest rate means high rates for lenders. This will attract more foreign capital, causing a rise in FX rates.
• Government debt can also impact the FX rates. It is the debt that is owned by the central government. If your country has a lot of government debt, it will be less likely to acquire foreign capital. This will lead to inflation. If market predicts government debt, foreign investors will start selling their bonds in the open market and this will decrease the value of exchange rate.
If you wish to save money on your India money transfer, you will have to understand all the factors that can impact the FX rates and compare different service providers. Comparing will ensure that you get attractive rates, making your remittance less expensive.
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