Finance, Forex and Investments

How EXACTLY does rise of a currency(say Indian Rupee) affect exports negatively? What else is affected?

some details needed as i am confused as to why exports will be affected..

Public Comments

1. when it rise, the people they're selling to will have to pay more for the same stuff
2. A rising currency means it is becoming more valuable than other currencies. That means when someone buys something from India (an export from India), they will need more of their own currency to exchange for the same # of Rupees they are used to paying. In other words it makes the Indian goods more expensive to them, so they are less likely to buy as much. For a similar reason imports become cheaper, since the Rupee will buy more foriegn goods than previously.
3. it doesn't. let's say you're an american. the dollar is low right now. that makes it an exporters market, because you will be making more money where the curracy is higher. whereas, if you import from a higher currancy market you will be getting less product.
4. We generally get the payment of our export shipment after a considerable time, say one month to maximum six month as per FEMA rules. Suppose we export our product worth Rs. 80/-, equal to 2 US dollar, prevailing rate of that time. We get the payment after three months and by that time rate of a US dollar comes to Rs.38/-. Then total payment towards export is of Rs. 76/- although yet it is of 2 US dollar. Not only this, all customs and other export incentives will be given at the prevailign rate of currency at the time of payment. This is reason rise of a currency affects the export negatively or downfall of currency affects the export positively.