Why do different countries have different currencies?
The money we use is a form of currency. We use this money to buy all our things! Almost every country has its own currency. That’s why there are almost 180 currencies in the world!
Different countries have different currencies because their governments spend this money differently.
How do we decide how much a currency is worth in another country?
We decide this using something known as a global currency. A global currency is used to compare itself with other currencies of the world.
Today, almost every country in the world considers the US Dollar (USD) to be a global currency. This is because it’s one of the most valued currencies in the world.
Who decided that the USD is a strong currency?
A long time ago, there was a great war. In this war, the US helped many other countries. In return, many countries gave back money and gold as payment for their help. By the end of the war, the US was very rich and had a lot of gold.
Since the USA had the most gold in the world, all countries agreed to make the US dollar a global currency.
USD vs. INR - who’s the winner?
The Indian rupee (INR) has always been lower than the USD. In 2012, 1 USD was equal to INR 53. In 2016, it was equal to INR 66. In 2019, it was equal to INR 70. As we can see, the value of the INR is slowly declining every few years.
As of 9 May 2022, 1 USD was equal to INR 77.42. This means 77 of our rupees don’t even make up one full US Dollar! In all of history, the rupee has never been so low.
What does this mean for us?
This means that the prices of things may soon go up. This includes everything from the cars we drive to the food we eat! People may find it hard to buy things they want at these new prices.
Imagine you’ve been saving up all week to buy your favourite chocolate for Rs.100, just to go to the shop and find out that the price is now Rs. 120! But don’t worry, the value of the rupee keeps changing and will soon go up.
