Journey Of Rupee: India is celebrating 75th anniversary of independence. India has made a lot of progress economically in the last 75 years. Now the target has been set to make India a developed economy in 2047. But in these 75 years the Indian currency has also come a long way. The currency of any country is seen as a barometer to measure the strength of that country’s economy. In 75 years, the Indian currency rupee has traveled from 4 to 80 rupees.
When India got independence in 1947, the value of one dollar was equal to 4 rupees. After that the Indian economy saw a lot of ups and downs. From economic crisis to reduction in food grains and industrial production had to be faced. The India-China war and the India-Pakistan war led to a payment crisis. India’s foreign exchange reserves used to be empty due to expensive import bills. India was on the verge of defaulting. Then former Prime Minister Indira Gandhi decided to devalue the rupee, after which the value of rupee against one dollar came down from 4.76 to 7.5 rupees.
In 1991, once again the Indian economy was engulfed in a cloud of crisis. India did not have foreign exchange to meet its import requirements. There was no money to pay off the loan. India was again on the verge of default. After which the decision of historic economic reform was taken.
To avert the crisis, the RBI devalued the rupee in two phases. First 9 percent and later 11 percent. After this devaluation, the value of rupee against one dollar became 26 rupees. That is, in the 75 years of independence, the rupee came down from Rs 4 to the level of Rs 79 to Rs 80. That is, the rupee has weakened by 75 rupees in 75 years. There are many reasons for the weakness of the rupee. The trade deficit widened due to the increasing import of crude oil. Which has reached close to $ 31 billion. Whereas when India got independence, there was no loss to India.
Due to the worldwide financial crisis in 2008, the rupee weakened further. The rupee which was at the level of 46.4 in 2009, which came down to the level of Rs 79.5 in 2022. But now the possibility of devaluation of the rupee is negligible. Because there is no shortage of foreign exchange reserves with RBI anymore.
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