Devaluation of Indian Rupee: Reasons & History Since 1947
Dec 22, · This is a popular outrage on social media these days about how on August 15, , the Indian rupee was equivalent to 1 US dollar. Sadly, this is not right. Exchanging 1 USD for INR in wouldn’t have exactly given you 1 Rupee. There were no outside borrowings on India’s balance sheet in when India obtained its independence. Mar 24, · Year-wise Dollar vs. Rupee- issues from to The value of 1 INR in was (if a direct comparison is not made). This value continued till But the Indian economy started witnessing a downfall starting from the s.
There are much better statistics to track progress of the country since independence. We what is the economy act a economy struggling at a growth rate of just 0. Life expectancy at birth has more than doubled from There are also enough indicators where a case can be made that we have not done as well as we should have.
Point being, that we don't have to resort to fictitious numbers to argue for or against any position. Wikipedia is known to have caused many such bloopers. Recently a Portugese-Maratha war article on wikipedia was found to be a hoax. Even I repeated an oft-used line of Kashmir having been sold to Gulab Singh in in a previous article but noticed later when reading the actual Treaty of Amritsar that the word Kashmir is not to be found there.
Kashmir is just 1 dollar is equal to how many rupees in 1947 of the region within the boundary allocated by the British and the treaty is not particularly about Kashmir. Over years, we have an inherent respect and trust for the written word. In the non-digital age, printing was expensive and restricted and the written word how to celebrate jewish holidays it's respect because of the care people invested in it before printing it.
The digital age has democratised and commoditised printing. Our habits and trust still belong to the non-digital age. The only lesson to draw here is to check sources and not believe everything written on a webpage.
It is easier said than done. Breaking News. Home Analysis. Written By Saurabh Chandra. A popular outrage to share these days on Facebook and Twitter is how the Indian rupee which was equal to 1 US dollar on 15th, August has fallen to the recent lows. An IANS news wire picked up by multiple newspapers also mentioned this very interesting 'fact'. Interestingly Narendra Modi's speech writers also fell for the same error recently.
The source of these seems to be this wikipedia article which mentions this exchange rate but does not cite any references in support of the number.
The graph given next to the section starts in the 90s. A good account of the two devaluations of and is given in this pape r by Johri and Miller. The peg to the pound was at INR InIndia changed the peg to dollar at INR 7. Surely, the exchange rates are not very meaningful when the currencies are fixed by governments and the unofficial rates would be usually even worse given the pressure British Pound was under post world war 2.
When I encountered this message, my main objection was that the exchange rate of a currency is not really an indication of its strength.
I am sure it is nobody's contention that India of is worse off than India of If low borrowings made up for strong currencies then North Korea might have been a front runner. Ambedkar made strong arguments for not fixing exchange rates long before independence and they remain valid till date.
As Ambedkar had mentioned, a stable currency is what matters rather than the absolute exchange rate.
1 USD to INR value during 1947
Jan 30, · When India became independent in the situation was very much different. It is believed that 1 INR used to be equal to 1 USD. There are multiple arguments about how 1 Dollar rupees in had a better value. The most common one is however that there was no metric system so all currencies had the same facetimepc.co: Thomas Cook India. India achieved independence on the 15th of August It was a new nation with no foreign debt/credit on its national balance sheet. Thus it can be inferred that Indian rupee was at parity with USD. Hence by this logic, we can conclude that 1 Rupee was equal to 1 USD in In 1 USD was Equal To I Rupee. Current USD to INR exchange rate equals Rupees per 1 US Dollar. Today's range: Yesterday's rate
Many travellers travelling abroad exchange INR to USD and then later get it converted to the local currencies to get a better rate. US Dollar is considered as one of the most valuable currencies in the world. Its status is on a level where most of the international trade and exchange is valued using this currency. You can start analysing the change in rate of 1 USD to INR in and see how exchange rate kept increasing in the coming years.
When India became independent in the situation was very much different. There are multiple arguments about how 1 Dollar rupees in had a better value.
The most common one is however that there was no metric system so all currencies had the same value. Another argument is that before , India was a British ruled state, so the value of INR was higher because value of pound was higher. Here it is believed that 1 Pound was equal to Since Independence in , the value of INR has consistently gone down. When India gained independence, it had to accept the international metric system and the value of rupee changed at the same moment. Since the time of Independence, Indian Rupee has been through a lot of situations that kept bringing down its value.
In the last ten years during which period of the great recession of has passed the US federal fund rates have been flat at 0. Decimalisation happened in The prefix naye was removed but the value continued.
This move was considered important because decimalisation always played a part in modernisation and revolutionary change in the currency system and for the economy. Making the lower denominations a part of Indian currency, the money was made accessible to every Indian citizen but it also increased the value of INR.
During this time, India was still a developing economy. In such scenarios, it is expected that India would import more than it exports. There were many attempts to keep positive trade balance but ultimately they failed. India had a consistent balance of payments deficits since the s.
The devaluation was the result of the first major financial crisis the government faced. India faced two major wars, against China and Pakistan during this time. This was another factor that led to the steep devaluation of 57 percent, taking the value of the rupee to Rs 7. Inflation had caused Indian prices to increase on a higher level and exchange rate simply became high. Also read: 8 Countries where Rupee is King. In Indian economists realized the value of liberalisation.
This reform was a part of the efforts that had begun in the s when India relaxed restrictions on imported capital goods as part of its industrialisation plan. This economic crisis happened because the government had a balance of payment problem. Constant delays brought it on the verge of defaulting.
Another reason for this problem was the open market that had taken control of its exchange. It was noted that on May 22, , INR was The reason behind this change was the surge in dollar demand from imports and capital outflows by FIIs pulling out the debt market that resulted in a fall in the value of the rupee.
In , the current Indian government took a step to remove the old currency notes and exchange them with newer bills. A lot was said and done about the step but it ended up playing a role in bringing INR to the range of 67 to 71 in the following years. It shows India was an economically backward country and increases the rates of imports.
Also Read: 10 things to check before you get your foreign exchange. I think the rupee will go the Japanese way till it reaches around Rs. This will happen around , after which India will become stronger economically. The unskilled population is a burden now on the economy and they pull down the value of Rupee. The turnaround will happen in with digital India becoming more aggressive and Chinese labour becoming more costlier.
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