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Exceed US $10,000/- or its equivalent Page 9 8 and/ or the value of foreign currency exceeds US $5,000/- or its equivalent, it should be declared to the Customs Authorities at the Airport in the Currency Declaration Form (CDF), on arrival in India.

Central banks manage currency by issuing new currency, setting interest rates, and managing foreign currency reserves. Monetary authorities also manage currencies on the open market to weaken or strengthen the exchange rate if the market price rises or falls too rapidly.

Foreign Exchange Risk Management Strategies Companies use different methods of protection against exchange rate fluctuations. The easiest strategy is to invoice and contract only in U.S. dollars, keeping expenses and revenues in the same currency.

Meanwhile, investing globally is a prudent strategy for mitigating currency risk, as having a portfolio that is diversified by geographic regions provides a hedge for fluctuating currencies. Investors may consider investing in countries that have their currency pegged to the U.S. dollar, such as China.

Maintaining Rates Governments of emerging market countries often do this to create stability in the value of their currencies. To keep the pegged foreign exchange rate stable, the government of the country must hold large reserves of the currency to which its currency is pegged to control changes in supply and demand.

Central banks and governments can intervene to help stabilize a currency by selling off reserves of foreign currency or gold, or by intervening in the forex markets. Currency crises have occurred throughout modern history, most notably in Asia and Latin America during the 1990s.

Exchange rates are constantly moving, based on supply and demand. Whether one currency is in higher demand than another, depends on the perceived value of owning it, either to pay for goods and services, or as an investment.

Meanwhile, investing globally is a prudent strategy for mitigating currency risk, as having a portfolio that is diversified by geographic regions provides a hedge for fluctuating currencies. Investors may consider investing in countries that have their currency pegged to the U.S. dollar, such as China.