when the price of a foreign currency rises its demand also incress how

Demand for foreign currencies is inversely related with the price of foreign currency (exchange rate). As the price of foreign currency rises, demand for foreign currency falls and vice versa. A rise in the price of foreign currency (from say, $1= Rs 40 to $1= Rs 50) implies that the goods from abroad become more expensive (that is, it now cost Rs 50 to purchase a commodity worth $1 instead of Rs 40 earlier). This would result in a reduction in the demand for the foreign commodities. This fall in the demand for foreign commodities reduces the demand for dollars and vice-versa.