The exchange rate itself discounts purchasing power of that currency.You can't double discount the purchasing power.Say, In start, a dollar in USA how do I compare it with Indian rupees to exchange it? Obviously the cue available is what the two currencies can buy at same place with their own experience.The other rates as fixed by banks are artificailly controlled by stupid governments and these economists to cause problems.You can't remain under water for whole life.You gonna get exposed.The dollar to rupee exchange rate has to be equal to the buying power.This is off the cuff expressed as Big Mac index.That is in similar type of shop and location what is cost of McDonald burger in NY and London and delhi.That ratio should be PPP and exchange rate should fall in ine with that.But govt manipulate it.By keeping Indian rupee low we are exporting our natural wealth and precious outside to USA and other countries.This is also expressed as Domestic resource cost.but by artifically clamping exchange rates these governemtns manipulate things and all ratios go haywire.
