Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.

Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

Submit Post
සිංහල පරිවර්තනය

Display results as :


Rechercher Advanced Search

Latest topics

» Market Sell Off
by DS Wijesinghe Today at 1:18 pm

» AEL Declines to 20.9
by cse_eagle Today at 10:23 am

» Marriott International to open its first Sri Lankan hotel in 2014
by mahasona Today at 12:09 am

» MACD A Powerful Tool to Predict Market Trends
by wiser Yesterday at 7:37 pm

by samaritan Yesterday at 7:20 pm

» No confidence motion and CSE
by samaritan Yesterday at 11:19 am

by Ran49 Yesterday at 7:39 am

» Wiser's TA Chart Room
by EquityChamp Mon Mar 19, 2018 3:23 pm

» HVA March reports
by Yazaar92 Fri Mar 16, 2018 3:32 pm

» Earn 1.5% daily interest.. guaranteed..
by Uaecoindubai Fri Mar 16, 2018 5:19 am

» At least 30 % return within 30 days
by Theekshana Thu Mar 15, 2018 9:28 pm

» Stocks we can buy at current situation
by Harry82 Thu Mar 15, 2018 5:55 am

» Sri Lanka Equity Research
by Mohamed Siraj Thu Mar 15, 2018 12:13 am

» A Humble Request to Fill Up an Online Survey for Research Purpose
by Mohamed Siraj Thu Mar 15, 2018 12:06 am

» CDB is Silent killer in Banks.
by Harry82 Wed Mar 14, 2018 7:55 pm

» CDB - Jounery Begun..
by ranferdi Wed Mar 14, 2018 1:07 pm

» What is the situation of Adam Group
by ranferdi Tue Mar 13, 2018 2:58 pm

by sharemarket Tue Mar 13, 2018 1:43 pm

» Egg Supply of sri lanka. (NEWS)
by suku502 Tue Mar 13, 2018 1:38 pm

» REEF getting GREEN
by Ran49 Mon Mar 12, 2018 9:45 pm

Forum Disclaimer

The information contained in this forum have been submitted by third parties directly without any verification by us. The information available in this forum is not researched or purported to be complete description of the subject matter referred to herein. We do not under any circumstances whatsoever guarantee the accuracy and completeness information contained herein. its blogs, forums, subdomains and/or its affiliates and/or its web masters, administrators or moderators shall not in any way be responsible or liable for loss or damage which any person or party may sustain or incur by relying on the contents of this report and acting directly or indirectly in any manner whatsoever.

Trading or investing in stocks & commodities is a high risk activity. Any action you choose to take in the markets is totally your own responsibility, its blogs, forums, subdomains and/or its affiliates and/or its web masters, administrators or moderators shall not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. The information on this website is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. The writers may or may not be trading in the securities mentioned.

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market News » Indian Rupee's journey since Independence: Down by 65 times against dollar

Indian Rupee's journey since Independence: Down by 65 times against dollar

Go down  Message [Page 1 of 1]



Aug 24, 2013, 01.54PM IST

SMC Capital

The Indian rupee, which was on a par with the American currency at the time of Independence in 1947, has depreciated by a little more than 65 times against the greenback in the past 66 years.

The rupee touched its historic record low of below 65 (intraday) against the dollar last week on sluggish local stocks and continued dollar demand from importers.

The currency has witnessed huge volatility in the past two years. This volatility became severe in the past three months affecting major macro-economic data, including growth, inflation, trade and investment.

Managing volatility in the currency markets has become a big challenge for policymakers. Despite of a series of measures taken by the central bank as well as the government to curb the volatility in the markets, the rupee continues to depreciate.

The trend is unlikely to reverse any time soon.

This rupee depreciation is badly hurting the Indian economy. It is fuelling inflation and has hurt economic growth.


The Indian currency has witnessed a slippery journey since Independence. Many geopolitical and economic developments have affected its movement in the last 66 years.

When India got freedom on August 15, 1947, the value of the rupee was on a par with the American dollar. There were no foreign borrowings on India's balance sheet.

To finance welfare and development activities, especially with the introduction of the Five-Year Plan in 1951, the government started external borrowings. This required the devaluation of the rupee.

After independence, India had chosen to adopt a fixed rate currency regime. The rupee was pegged at 4.79 against a dollar between 1948 and 1966.

Two consecutive wars, one with China in 1962 and another one with Pakistan in 1965; resulted in a huge deficit on India's budget, forcing the government to devalue the currency to 7.57 against the dollar.

The rupee's link with the British currency was broken in 1971 and it was linked directly to the US dollar.

In 1975, value of the Indian rupee was pegged at 8.39 against a dollar.

In 1985, it was further devalued to 12 against a dollar.

In 1991, India faced a serious balance of payment crisis and was forced to sharply devalue its currency. The country was in the grip of high inflation, low growth and the foreign reserves were not even worth to meet three weeks of imports. Under these situations, the currency was devalued to 17.90 against a dollar.

1993 was very important. This year currency was let free to flow with the market sentiments. The exchange rate was freed to be determined by the market, with provisions of intervention by the central bank under the situation of extreme volatility. This year, the currency was devalued to 31.37 against a dollar. The rupee traded in the range of 40-50 between 2000 and 2010.

It was mostly at around 45 against a dollar. It touched a high of 39 in 2007.

The Indian currency has gradually depreciated since the global 2008 economic crisis.

Liberalising the currency regime led to a sharp jump in foreign investment inflows and boosted the economic growth


In the week gone by, the Indian rupee extended falls to a new low of 65.50 to the dollar as heavy demand from importers along with weak domestic equities continued to weigh on sentiment.

Weakness was also seen after Federal Reserve minutes hinted that the United States was on course to begin tapering stimulus as early as next month.

Moreover, continuing its slide, the rupee also made all time low against British pound and breached the 102-mark on local bourses.

With this, British pound has become the first major foreign currency to cross 100 levels against rupee.

However, steps taken by the RBI and the government to curb volatility in the exchange rate have had little effect so far.

The government is now exploring structural measures to narrow the current account deficit, Finance Minister P Chidambaram said, adding that there is no plan to introduce capital controls.

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum