The historic fall of the Indian currency.
By Dileep Thekkethil
The Indian rupee hit the nadir Monday as strong job numbers in the United States boosted the dollar.
At one point on Monday, it dropped to 61.2125 per dollar, the lowest ever. It is quite a plunge for a currency that had parity with dollar on August 1, 1947, the day India became independent. (Since 1947, the U.S. dollar itself has lost quite a lot of value. According to the U.S Department of Labor’s Bureau of Statistics, $1 in 1947 is worth $10.45 today.)
The first major slide of the rupee occurred on June 5, 1966, when the government of Prime Minister Indira Gandhi devalued the currency 36.5 percent because of inflationary pressures. In a single day, it dropped from 4.75 per dollar to 7.50. Its value continued to decrease in the 1980s, touching 17.5 in 1990. In July 1991, due to an external payment crisis, then-Finance Minister Manmohan Singh devalued rupee, shaving off 18 percent of its value against dollar.
The following table shows the continued decline of the Indian currency since the early 1990s.
Year |
Average exchange rate per US dollar |
1993-94 |
31.37 |
1994-95 |
31.4 |
1995-96 |
33.46 |
1996-97 |
35.52 |
1997-98 |
37.18 |
1998-99 |
42.13 |
1999-00 |
43.34 |
2000-01 |
45.71 |
2001-02 |
47.69 |
2002-03 |
48.4 |
2003-04 |
45.92 |
2004-05 |
44.95 |
2005-06 |
44.28 |
2006-07 |
45.28 |
2007-08 |
40.24 |
2008-09 |
45.92 |
2010 |
45.7 |
2011 |
46.7 |
2012 |
53.4 |
Source: Reserve Bank of India