What factors determine the foreign exchange rate of a country?

Numerous factors could affect the exchange rate of a country. Here I have rounded up on some factors that have an upper-hand on the exchange rate of a country.rnInflation: When the inflation rates lower the currency value becomes higher and vice versa. It is the rate of rising prices of commodities in a country that directly impacts the cost of living there.rnDebts: If the central government of a country has taken heavy debts it's likely they attract foreign investors thus lowering their exchange rates.rnInterest rates: Higher interest rates could catch the eyes of investors who look for high returns. This will result in growing exchange rates. And the opposite will result in depreciation of exchange rates. rnEconomic stability and Political Stability: If a country's economy is consistent and predictable it will, in turn, makes investors more secure investing there. And a country with less political tension is also a go-to place for investors. Thus, these both play an important role in the rising exchange rates of a country. rnGuidelines of trade: A simple and more flexible trade guidelines will increase the chances of investors investing in the country. Which will boost the economy and follow will be an increase in their currency value. rnImport and Export: If a country could export goods at a higher rate than its import culture its exchange rates will be doing better. Higher export rates create high demand for a country’s currency which makes its exchange rates higher. Contradictory to it will make the exchange rates fall. rnTourism: The final and common factor for every economic development or fall will surely point to tourism and it’s no difference here. An increase in foreign visitors could increase the cash flow to a country thereby rising its income and currency value at a quick pace. This could increase the exchange rates. rnRecession: This comes as a setback to every country. If a country goes through a recession its interest rates will fall, inflation rates shoot up, debts increase, and at-last its currency loses its value. Thereby lowering the exchange rates.