Independence Day: How the rupee went from less than 4 a dollar in 1947 to 83 today
Indian rupee on Monday opened below the 83-mark against the dollar, the lowest for the currency since October 2022 when it had dipped to a historical low of 83.26. After India became independent, one dollar could be bought at less than four rupees. As the country marks 76 years of freedom, the rupee has gone down by nearly 20 times.
Devaluations, trade imbalances, budget deficits, inflation, global fuel prices, economic crises, etc. made the rupee constantly depreciate against the dollar. The story of the rupee's transformation is also the story of India's transforming economy as it went through various ups and downs.
From its humble beginnings to becoming an influential player in the global financial landscape, the evolution of the Indian rupee is a testament to the nation's economic and policy shifts and global integration. The rupee has been hovering around 82 against the US dollar. In the past year, the Indian currency has remained volatile and has hit record lows.
The depreciation can be attributed to a positive dollar and a weak tone in domestic markets. The selling pressure by foreign investors may also weigh on the rupee. However, it was not the case since the beginning of the Independent India era.
Post-independence, the rupee was pegged to the British Pound. This created a stability in trade and financial transactions. On the other hand, the arrangement restricted the country's monetary flexibility and independence as it compelled India to rely on the pound’s strength instead of its own economic fundamentals.
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