How Exchange Rates Work
Foreign exchange (Forex) rates determine how much one currency is worth in another. These rates fluctuate by the second based on global economics, inflation rates, and geopolitical stability.
The Mid-Market Rate
Our converter uses the mid-market rate—the midpoint between the buy and sell prices of two currencies. This is the "real" exchange rate you see on Google or Reuters. However, banks and airports often add a hidden markup of 3-5% when exchanging cash.
Purchasing Power Parity (PPP)
Exchange rates don't always reflect the true cost of living. The PPP model (like the famous Big Mac Index) adjusts currency rates based on the actual cost of a basket of goods in different countries, explaining why ₹1,000 buys vastly different lifestyles in New York versus Mumbai.