Final answer:
Exchange rate fluctuations can have a substantial impact on businesses engaged in international trade, and central banks may regulate these rates to ensure a stable business climate. The value changes of currencies like the Indian rupee are influenced by economic factors, interest rates, and geopolitical events.
Step-by-step explanation:
The fluctuations in exchange rates of various currencies can be significant over time. For instance, the Indian rupee depreciated from 39 rupees/dollar to 51 rupees/dollar between February 2008 and March 2009. Such changes impact businesses involved in export, import, or competing with international trade, effecting their profits and losses substantially. Central banks often strive to offer a stable business environment by regulating these fluctuations, supporting companies to focus on productivity and innovation instead of exchange rate volatility.
Exchange rates are influenced by a variety of factors, including economic performance, interest rates, and geopolitical stability. Factors such as foreign direct investments (FDI) and portfolio investments can also affect currency valuation. Appreciating or depreciating currency can benefit or harm different sectors of the economy, depending on their reliance on foreign markets.