Dollar vs Rupee ,Why is rupee is cheaper than the dollar?
Dollar vs Rupee ,Different countries use different currencies. When a person working in America comes to India and changes his dollars into Indian rupees, he becomes rich. Have you ever wondered? Why someone who works in India and goes to America can’t become rich there? There is an interesting reason behind this, which we will tell you today. Actually, the value of the Indian rupee is lower than the dollar. So why is this happening? Many people don’t know. Find out about that…
Currently, the exchange rate of the Indian rupee against the dollar is around 86.46. This means that if someone from the US comes to India and exchanges 1 dollar for Indian rupees, they will get a total of 86.46 rupees. So why does this happen? As recently as two or three days ago, it was around 87 rupees to the dollar. There is an interesting reason behind why the Indian rupee has been consistently weakening against the dollar.
Let us state that in 2014, one dollar was worth 61 rupees. Now we have seen a decline in this. It is continuously decreasing. This means that the exchange rate of the Indian rupee is decreasing.The Indian rupee has gone through many ups and downs since independence. It has been significantly affected by many political and economic events over the past 77 years. When India got independence, 1 dollar and 1 rupee were of equal value. There was no debt of any kind on the Indian balance sheet. But to meet the welfare and development activities, India started borrowing from abroad.
This was especially seen after the start of the Five Year Plan in 1951.After independence, India went through a fixed exchange rate system. From 1948 to 1966, it was around Rs 4.79 to the dollar. It has now reached Rs 86.46 .Then India fought wars with China and Pakistan in 1962 and 1965. As a result, this affected the exchange rate of India, and it became 7.57 rupees to 1 dollar. Because at this time India’s budget was reduced. In 1971, the rupee was devalued from the British pound. As a result, it became directly and completely pegged to the dollar.
At that time, the dollar was worth about 8.39 rupees.Later, in 1985, it was Rs 12, and in 1991, it was Rs 17.90. This was because at that time, India’s debt crisis had become serious. The country had high inflation and a low growth rate. In 1993, the exchange rate was determined by the market. In that year, the rupee depreciated to Rs 31.37. Later, it was in the range of Rs 40-50 in 2000-2010. It was around Rs 45 against the dollar. In 2008, the Indian rupee started to weaken significantly due to the global financial crisis. The outflow of funds from the Indian market by foreign institutional investors (FIIs) has a significant impact on the currency. This has weakened other currencies and the rupee due to the strength of the US dollar in the global market.
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