Dollar rupee india5/17/2023 ![]() Also, stagnant reforms and declining foreign investments to the country depreciated the value of rupee in 2013. Increased imports resulted in a surge in dollar demand in 2013. Foreign investments were taken out of the country that led to this depreciation. But this trend reversed in late 2008 when the global economic recession materialised. The major reason that led to the appreciation of Rupee was the sustained inflow of foreign investments to the country. The rupee hit an all-time high value of Rs 39 for a dollar in late 2007. 2000 – 2013įrom the year 2000-2007 value of rupee was pretty stabilized in the range of Rs 40-48 for a dollar. In 1992 RBI was low on dollar reserves and found it difficult to maintain the peg and hence the adoption of the floating exchange rate in 1993. The high inflation rate, budget deficit, all forced the government to devalue the rupee. This was a critical situation as India’s foreign reserve could barely meet three weeks of imports. India was still on the fixed exchange rate system. A decade later, in 1985 Indian rupee was devalued again at Rs 12 for 1$.įrom 1985 India began to face a balance of payments deficit and in 1991 this issue spiked to a serious economic crisis. In 1975 the value of Indian currency was 8.39 for a dollar. In 1971 INR was officially pegged against the Dollar. The government was forced to devalue rupee to Rs 7.5 for 1 $. The drought of 1965/1966 became another reason for Rupee downfall. The government then issued bonds to the RBI, which resulted in inflation.įurthermore, the Indo-China war in 1962, the Indo-Pakistan war in 1965 worsened the situation resulting in a huge deficit on India’s budget. In addition to the trade deficit, the government was subjected to a budget deficit which made the scenario even more difficult as the government couldn’t borrow money from abroad or the private corporate sector. India was facing a massive trade deficit from 1950 and in 1966 it just got spiked. In 1966, India witnessed one of the major financial crises. As external borrowing was necessary, the government had to devalue INR. Indian rupee which was considered at par with dollars in 1947 started to devalue with the introduction of many developmental activities, especially the Five-Year Plan in 1951. Many geopolitical and economic developments have had direct impacts on Indian rupee in the last 73 years. The Indian rupee has witnessed many downfalls since 1947. Graphical representation of Exchange rate of INR per USD Let’s see the USD-INR rates from 1947 to 2020 Since the independence Rupee has been on a weakening trend. INR on the other hand is no exception in trading on a global level. Also, one of the most recognisable currencies in the whole world is USD. The volume of business where USD is a part is huge. Most of the other international currencies are pegged against dollars to determine their value on a global level. America’s economic world supremacy has made its currency very strong. We needn’t explain how powerful the US dollar is. The absence of a standard form of currency comparison until 1944 resulted in proving the first argument practical. Hence by this logic, we can conclude that 1 Rupee was equal to 1 USD in 1947. Thus it can be inferred that Indian rupee was at parity with USD. It was a new nation with no foreign debt/credit on its national balance sheet. India achieved independence on the 15th of August 1947. Hence we can conclude that on spending 1 Rupee we could not have bought 1 USD in 1947. Now let’s see the exchange rates of INR in 1947 with respect to the Pound Sterling and US Dollar. So before USD was taken as the standard global currency, INR was fixed against Pound Sterling. This pegging pattern continued till 1966. Approach 1īritish regime in India ended in 1947 and the Indian currency then was pegged against the Pound Sterling. The statement cannot be regarded as either true or false. Let us look into this with some facts from history. So ‘was 1 rupee really equal to 1 USD in 1947’? Or was it just a fallacy? Of late there has been an outrage on social media claiming that you could get 1 USD with 1 INR in 1947 when India became independent. Was 1 Rupee Really Equal To 1 USD In 1947?
0 Comments
Leave a Reply. |