The currency exchange rates, facts and myths.

Post Bretton woods summit, it was declared that one USD was exchangable for one ounce of gold, if held by a foreigner. For US citizens, however, it was not exchangeable for gold henceforth.
In August 1971, Nixon declared that USD will not be exchanged for gold anymore, irrespective of who held it.
Most currencies thereafter were traded against each other, their value depending on the compromise of buyer and seller of one currency for another.
The White House further got OPEC on its side and played its diplomacy to make it cumpolsory that OPEC accept only USD for all the oil it sold. (Was Saddam Hussein routed for having uttered his idea of accepting Euro instead of USD by OPEC! But that is beyond our subject)
With prime pumping as the driving force in India, which has been a hallmark of the ruling party since the time of the late prime minister of India, Ms Indra N Gandhi, there has been considerable growth in size of towns and cities and lot of real estate develpoment and construction activity. The consumption of oil, a major fraction of which is imported, has consequently increased in a spiral. Though the Indian domestic consumers of oil pay in INR, the nation has to pay the oil bill in USD.
How does it procure USD? Through exports?
The balance of trade is tipped against the nation which means that the nation hardly earns sufficient USD to pay the oil bill. So what it does is simply sell INR against USD and thus pay the oil bill from the USD bought by selling INR.
The result: INR is loosing its value. It was equal to one USD in 1947 and as of now one USD is equal to 61.02 INR. (as we write on March 21 2014)
All other theories that are being floated in media on exchange rate are just myths.