The Indian
rupee, which was at par with the American currency at the time of independence
in 1947, hit a record low of 63.30 against a dollar Monday. This means the
Indian currency has depreciated by more than 63 times against the greenback in
the past 66 years.
Managing
volatility in the currency markets has become a big challenge for the economic
policy makers in the country. The central bank as well as the government has
taken a series of measures to curb the volatility in the markets.
The Indian
currency has witnessed a roller-coaster journey since independence. Many
geopolitical and economic developments have affected its movement in the last
66 years. Here is a broader look at the Indian rupee's journey since 1947:
·
1947 – Indian Rupee was at par with American dollar. No foreign
borrowings on the India’s balance sheet.
·
1951 – Devaluation of money as a result of external borrowing for
welfare and developmental activities.
·
1948-1966 – Fixed rate currency regime. Rupee pegged at 4.79
against dollar.
·
1962 and 1965 – Wars with China and Pakistan respectively impacted
the deficit adversely. Rupee devalued to 7.57 against 1 dollar.
·
1971 – Rupee’s link with British currency broken.
·
1975 – The rupee linked to US dollar, Japanese yen and German
mark. Rupee valued at 8.39 against the dollar.
·
1985 – Rupee further devalued to 12 against a dollar.
·
1991 – Balance of payment crisis. The foreign reserves were not
even worth to meet three weeks of imports. The currency was devalued to 17.90
against a dollar.
·
1993 – The currency was let free to flow with the market
sentiments. The exchange rate was freed to be determined by the market. One was
required to pay Rs.31.37 to get a dollar.
·
2000-2010 – The rupee traded in the range of 40-50 against the
dollar.
The Indian currency hit a record low of 63.30 against a dollar Monday, surpassing its previous record low of 62.03 hit on Aug 16.
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