In comparing the INR/USD, it has been quite a trip for the Rupee over the years as the figure shows. It is the same with Rupee, which like most currency kinds, has been receiving some impacts from government policies, inflation structure, and changes in the global economic conditions. This paper looks at how the relative value between Rupee and Dollar affects India. This exchange rate is almost always followed by many businesses, travelers, and investors.
After India had become independent in 1947 the Indian Rupee was fixed at the equivalent of the pound sterling. The exchange rate then was INR-USD 1:1, yet, the rupee was never as liquid in the foreign exchange market as it is today. It was strictly under the administrative control of the government and there was restricted foreign exchange.
Once India started opening up and growing, then the consumption of foreign products began to rise, and with this the demand for foreign exchange. This put much pressure on the Rupee and the government had to change this in its value several times. The starting of gradual depreciation was witnessed since the early 1960s.
INR to USD Currency Exchange Rate – 20 Year Graph
INR to USD Currency Exchange Rate 20 Year Graph
Historical Indian Rupee Rate (INR USD)
Historical Indian Rupee Rate (INR USD)
1947 – 1951: Post-Independence Stability
Year
USD to INR Exchange Rate
1947
1.00
1948
3.31
1949
4.76
1950
4.76
1951
4.76
1952 – 1956: Fixed Exchange Rate
Year
USD to INR Exchange Rate
1952
4.76
1953
4.76
1954
4.76
1955
4.76
1956
4.76
1957 – 1961: Continued Stability
Year
USD to INR Exchange Rate
1957
4.76
1958
4.76
1959
4.76
1960
4.76
1961
4.76
1962 – 1966: First Major Devaluation
Year
USD to INR Exchange Rate
1962
4.76
1963
4.76
1964
4.76
1965
4.76
1966
7.50
1967 – 1971: Post-Devaluation Adjustment
Year
USD to INR Exchange Rate
1967
7.50
1968
7.50
1969
7.50
1970
7.50
1971
7.50
1972 – 1976: Rising Inflation and Depreciation
Year
USD to INR Exchange Rate
1972
7.59
1973
7.74
1974
8.03
1975
8.39
1976
8.96
1977 – 1981: Inflation and Global Pressures
Year
USD to INR Exchange Rate
1977
8.73
1978
8.19
1979
8.20
1980
7.86
1981
8.66
1982 – 1986: Gradual Depreciation
Year
USD to INR Exchange Rate
1982
9.46
1983
10.10
1984
11.36
1985
12.36
1986
12.61
1987 – 1991: Pre-Reform Years and Major Devaluation
Year
USD to INR Exchange Rate
1987
12.96
1988
13.92
1989
16.23
1990
17.50
1991
22.74
1992 – 1996: Economic Liberalization and Market Reforms
Year
USD to INR Exchange Rate
1992
25.92
1993
31.37
1994
31.39
1995
32.42
1996
35.52
1997 – 2001: Asian Crisis and Stabilization
Year
USD to INR Exchange Rate
1997
36.31
1998
41.26
1999
43.06
2000
44.94
2001
47.19
2002 – 2006: Post-Crisis Recovery
Year
USD to INR Exchange Rate
2002
48.61
2003
46.58
2004
45.32
2005
43.96
2006
45.18
2007 – 2011: Global Financial Crisis and Aftermath
Year
USD to INR Exchange Rate
2007
41.20
2008
43.50
2009
48.32
2010
45.73
2011
46.67
2012 – 2016: Rupee Depreciation and Volatility
Year
USD to INR Exchange Rate
2012
53.43
2013
58.63
2014
62.33
2015
63.75
2016
66.77
2017 – 2021: Fluctuations Amid Global Uncertainty
Year
USD to INR Exchange Rate
2017
64.15
2018
68.95
2019
70.88
2020
74.13
2021
74.50
2022 – 2023: Recent Trends
Year
USD to INR Exchange Rate
2022
79.80
2023
82.00
Major Changes in the 1990s
The decade of 1990s is considered as a new era for the economic front of India. India’s external sector was under monumental pressure in 1991 due to a balance of payment problem which made the Rupee to depreciate. In order to prevent the escalation of the crisis, the government was forced to launch the series of the liberalizations which made the Indian market open for foreign investments. The Rupee was devalued so as to make the exports made by India competitive in the international market.
The exchange rate of 1991 was 17.90 INR for 1 USD. for the next decade the value depreciated and in the year 2000 1 USD was equivalent to about 44 INR. It was somewhat attributed to inflation, growing need for foreign exchange, and integration of India to the Global economy since liberalization in the early 1990s.
The Effect of World Financial Crisis
The year 2008 global financial crisis affected all the world economy and of course was indicative of the India economy. One of the major currencies to be affected was the Rupee that stared depreciating and to the worst hit it fell drastically. For the year 2008 the value of 1 USD was approximately equal to 39 INR. However, it had turned to 46 INR upon the year 2010.
As the global markets become more unpredictable, the safe haven currency of choice was the US Dollar. This consequently led to an even worse situation for the Rupee and more so the Dollar – for the Rupee.
2010s: Fluctuations and Volatility
As for the exchange rate fluctuations the latter part of the 2010s experiences the volatility that Bangladesh faced in late 2000s, the Indian Rupee reached its lowest record in year like 2013 when one dollar tried to touch 68.80 Rupees in India. This was due to other factors like the cut down in the quantitative easing program by the US Federal Reserve and a consequent emergence market funds outflow, particularly India.
In the given period, the Indian government and the Reserve Bank of India (RBI) made following measures to begin to stabilize the Rupee: a) increase in the rates of interest b) capital controls. Preliminary solutions offered some help though the Rupee kept on oscillating.
Recent Trends
The last few years have witnessed further decline in respecting the US Dollar from India Rupee. Currently the exchange rate is 1 USD = 82 INR as of 2023. The following are some of the reasons that may have led to this trend; the trade deficit in India, world economic declines and horrible oil prices. This was also the case in the COVID-19 pandemic when all economies were affected and there was unpredictable in markets.
Abhishek Kumar
I a finance writer with 2+Year of Exp in financial topics. With Computer Science degree, content writer, SEBI-certified investor, and stock market enthusiast.
