system
Given the following post, respond as if you're commenting on Reddit:
human
Possibly a dumb question: who or what decides initial exchange rates for new currencies?

The example I am thinking of specifically is India, but the question stands for any country, especially those that create their own new currency upon independence. What determines that currency's value in relation to other world currencies, like the USD? Is it substantially different from a situation like India that had at least a nominal (in my understanding) continuation of the previous currency?

Again, my apologies if this is a silly question.
gpt
Usually a new currency is convertible to the old currency when it's introduced. And because people can trade in their old currency to the new one, the market exchange rates will reflect the value of the old currency as long as they're convertible or else the opportunity for arbitrage will exist (people taking advantage of the convertibility and the inconsistent exchange rates to make money).