If you’re planning to travel to the United States shortly, whether it be for job or studies related purposes, you will need a handful of cash to keep you steady. Your Indian rupees won’t work in the US, instead, you’ll need to convert it to dollars. This article will guide you through the process of Dollar Exchange in India.
An overview of the United States dollar:
The United States dollar is quite different to the Indian rupee. The denominations for the US dollar are 1, 5, 10, 25, 50, 100, and 500. The symbol for the United States dollar is $.
How does currency conversion work?
The main parameter for determining currency conversion is the exchange rate. The exact exchange rate of a currency is never constant and varies from week to week similar to stocks. Institutions are always buying and selling currencies round the clock. For such a trade to happen, two different currencies must be exchanged with each other. For example, if you are using INR (Indian Rupee) to buy USD (United States Dollar), the exchange rate is denoted as USD/INR. The currency to be converted is always placed on the right and the resultant currency is always placed on the left.
Calculating an exchange rate:
For purely example purposes, let’s say that the exchange rate for the USD/INR pair is around 60 INR. This means that it costs around 60 rupees to buy a single US dollar. The exchange rate simply denotes how much INR is used to buy 1 USD.
To calculate the reverse, that is how much US dollars it takes to buy one Indian rupee, you can use the formula 1/exchange rate. In this case, it’s 1/60 which amounts to around 0.016. So you need 0.016 dollars to buy one Indian rupee.
When you go to the bank or a currency exchange firm to exchange INR for USD or vice versa, you should know that you will not get the same rate that is on the market. If it’s 60 rupees to buy one US dollar, the firm or may bank may demand around 65 rupees instead. This helps them make a profit while also satisfying their customers. This applies to credit cards as well as services such as PayPal which are available worldwide.
Generally, such firms or banks will have a fixed markup. A markup is nothing but the percentage of profit that the bank/firm makes while performing an exchange. In the case that the bank charges 65 rupees for one dollar, the markup rate can be calculated as 65-60/60. Multiply the answer by 100. In this case, the markup is at 8.3%.
Finding a firm or a bank with an exchange rate is closest to the normal bank rate should be your primary goal. In some cases, the firm or bank may pay customers some form of cash instantly in exchange for them paying the required markup.
When it comes to Dollar Exchange in Delhi, the actual exchange rate for USD/INR is 74.42. This number has seen a steady increase in the past few years and is expected to continue that way for a good few years.
The wrap up:
Finding a bank or an exchange firm with a favorable markup is always one of the more tricky parts about currency conversion. You mustn't burn a hole in your pocket or settle for an unreliable firm just to get the job done quickly. Always look to save as much money as possible because as the saying goes, money saved is money earned.