📜 INR vs USD: 1947 - 2026
The trajectory of the Indian Rupee (INR) offers a panoramic view of India's economic history. From the early days of a fixed exchange rate regime pegged to the British Pound (approx ₹3.30/$) to the market-determined era post-1993, the currency has witnessed volatility driven by wars (1962, 1965, 1971), the Balance of Payments crisis (1991), and modern global financial shifts, culminating in the ₹90.5773 mark in 2026.
1947
₹3.30
1992
₹25.92
10/02/2026
₹90.577
📊 Exchange Ledger
Period Recorded
(INR/USD)
01/01/2026 ➜ 10/02/2026
Current Year (YTD)
89.9792
➜
90.5773
01/01/2025 ➜ 31/12/2025
2025 Fiscal
85.7090
➜
89.9198
01/01/2024 ➜ 31/12/2024
2024 Fiscal
83.1975
➜
85.6232
02/01/2023 ➜ 29/12/2023
2023 Fiscal
82.6287
➜
83.1164
03/01/2022 ➜ 30/12/2022
2022 Fiscal
74.3115
➜
82.7862
01/01/2021 ➜ 31/12/2021
2021 Fiscal
73.0328
➜
74.3025
01/01/2020 ➜ 31/12/2020
2020 Fiscal
71.3717
➜
73.0536
01/01/2019 ➜ 31/12/2019
2019 Fiscal
69.7131
➜
71.2740
01/01/2018 ➜ 31/12/2018
2018 Fiscal
63.6697
➜
69.7923
02/01/2017 ➜ 29/12/2017
2017 Fiscal
68.0225
➜ 63.9273
01/01/2016 ➜ 30/12/2016
2016 Fiscal
66.1780
➜
67.9547
01/01/2015 ➜ 31/12/2015
2015 Fiscal
63.3213
➜
66.3260
01/01/2014 ➜ 31/12/2014
2014 Fiscal
61.9335
➜
63.3315
01/01/2013 ➜ 31/12/2013
2013 Fiscal
54.8320
➜
61.8970
02/01/2012 ➜ 31/12/2012
2012 Fiscal
53.2975
➜
54.7773
03/01/2011 ➜ 30/12/2011
2011 Fiscal
44.6700
➜
53.2660
01/01/2010 ➜ 31/12/2010
2010 Fiscal
46.6500
➜ 44.8100
01/01/2009 ➜ 31/12/2009
2009 Fiscal
48.7300
➜ 46.6800
01/01/2008 ➜ 31/12/2008
2008 Fiscal (Global Crisis)
39.4200
➜
48.4500
02/01/2007 ➜ 31/12/2007
2007 Fiscal
44.2000
➜ 39.4100
02/01/2006 ➜ 29/12/2006
2006 Fiscal
45.0500
➜ 44.2300
03/01/2005 ➜ 30/12/2005
2005 Fiscal
43.6100
➜
45.0700
01/01/2004 ➜ 31/12/2004
2004 Fiscal
45.6100
➜ 43.5800
01/01/2003 ➜ 31/12/2003
2003 Fiscal
47.9900
➜ 45.6100
01/01/2002 ➜ 31/12/2002
2002 Fiscal
48.2400
➜ 48.0300
01/01/2001 ➜ 31/12/2001
2001 Fiscal
46.6600
➜
48.1800
03/01/2000 ➜ 29/12/2000
2000 Fiscal
43.4802
➜
46.7500
01/01/1999 ➜ 30/12/1999
1999 Fiscal
42.4701
➜
43.5199
25/08/1998 ➜ 31/12/1998
1998 (Partial)
42.5007
➜ 42.4809
1947 ➜ 1997
The First 50 Years
3.30
➜
36.31
📝 Why Does INR Depreciate?
I. Structural Determinants
Economic Theory
1. Inflation Differential Theory
According to the Purchasing Power Parity (PPP) theory, a country with a higher inflation rate (India) than its trading partner (USA) will see its currency depreciate. Historically, India averages 5-7% inflation vs 2-3% in the US, naturally eroding the Rupee's value over decades.
Trade Balance
2. Current Account Deficit (CAD)
India consistently imports more than it exports. This creates a "Dollar Deficit." To bridge this gap, India needs to buy dollars, increasing demand for USD and lowering the value of INR.
II. Global & External Headwinds
Energy Security
1. The "Petro-Dollar" Effect
India imports over 85% of its crude oil requirements. Oil is traded globally in USD. Whenever geopolitical tensions (e.g., Middle East conflicts) push oil prices up, India's demand for dollars spikes immediately, weakening the Rupee.
US Fed Policy
2. Capital Flight (FII Outflows)
When the US Federal Reserve hikes interest rates (as seen in 2025-26), global investors pull money out of emerging markets like India to park it in safe US Treasury Bonds. This sudden outflow of dollars crashes the local currency.
III. Socio-Economic Impact
- Imported Inflation: Expensive dollars make imported goods like edible oil, electronics, and machinery costlier, fueling domestic inflation.
- Education Cost: Indian students studying abroad face a double whammy—tuition fees and living expenses (rent/food) increase drastically in Rupee terms.
- External Debt: Companies that borrowed money in dollars (ECBs) have to pay back much more in Rupee terms, straining their balance sheets.
IV. Conclusion & The Way Forward
While short-term volatility is concerning, the RBI actively manages volatility by selling dollars from its Forex Reserves (which stood strong at $600B+ levels). The long-term solution lies in Export Diversification (Make in India), reducing oil dependency (Green Energy transition), and attracting stable FDI (Foreign Direct Investment) rather than volatile FII money.
🏛️ Evolution of Exchange Rate Regimes (GS-3)
A critical chronological timeline for UPSC Mains Answer Writing on Economy.
1947 - 1971
Par Value System
The Rupee was pegged to the British Pound Sterling. The rate was fixed (approx ₹13.33/Pound initially). It followed the Bretton Woods system where most currencies were pegged to the USD or Gold, but India chose the Pound due to historic colonial trade ties.
1975 - 1991
Basket Peg
To avoid shocks from a single currency fluctuation, the Rupee was pegged to a "Basket of Currencies" of India’s major trading partners. The RBI officially determined the daily exchange rate.
1991 - 1993
Transitional Phase (LERMS)
Post-1991 Crisis, India adopted the Dual Exchange Rate system (LERMS). Exporters had to surrender 40% of earnings at a low official rate (for govt imports) and could sell the remaining 60% at a market rate.
1993 - Present
Managed Float
India unified the exchange rate. We now follow a Market Determined system where demand and supply decide the rate. However, the RBI intervenes (buys/sells USD) only to reduce volatility, making it a "Managed Float" or "Dirty Float."
🧠 NEER vs REER (Prelims/Mains)
Understanding these terms is vital for analyzing export competitiveness.
NEER (Nominal Effective Exchange Rate)
It is the weighted average value of the Rupee against a basket of currencies of major trading partners.
UPSC Insight: If NEER < 100, the Rupee has depreciated against the basket. NEER does not account for inflation.
REER (Real Effective Exchange Rate)
It is the NEER adjusted for the Inflation Differential between India and its trading partners.
UPSC Insight: REER is the true measure of International Competitiveness. If REER > 100 (Overvalued), our exports become expensive and lose competitiveness.
🚀 Internationalization of Rupee
What is it?
The process of using INR for cross-border transactions (Import/Export) instead of the US Dollar. This reduces India's demand for Dollars and shields the economy from global shocks.
Key Mechanism: Vostro Accounts
Foreign banks open Special Rupee Vostro Accounts (SRVA) with Indian banks. For example, a Russian importer pays Rupees into this account, and Indian exporters are paid from this balance. This mechanism is currently being pushed with countries like Russia, UAE, and Sri Lanka.
Benefits for India (Mains Points)
- Reduces Exchange Rate Risk for Indian traders.
- Lowers the Cost of doing business (no conversion fees).
- Helps save India's precious Forex Reserves.
- Enhances India's Geo-economic influence globally.
❓ Frequently Asked Questions (FAQs)
Q1. Was 1 USD really equal to 1 INR in 1947?
No, this is a distinct internet myth. In 1947, India was a British colony/dominion, and the Rupee was pegged to the British Pound. Based on the Pound-Dollar rate of that time, the derived value was approximately ₹3.30 per USD.
Q2. What is the difference between Devaluation and Depreciation?
Devaluation is an official reduction in the value of a currency by the government (happened in 1966 & 1991). Depreciation is when the market forces (supply and demand) reduce the value of the currency (happening now).
Q3. Why doesn't the government just print more dollars?
A country cannot print another country's currency. India can only print Rupees. To get dollars, India must earn them through exports, tourism, or foreign investment.
Q4. How does a weak Rupee help India?
It acts as a stimulus for Exporters. IT companies (TCS, Infosys) and Textile manufacturers earn in dollars. When they convert those dollars to Rupees, they get more money, boosting their profitability and allowing them to employ more people.
Q5. What is the RBI doing to stop the fall?
The RBI uses its Forex Reserves to intervene. When the Rupee falls too sharply, the RBI sells dollars into the market to increase supply and stabilize the price. They do not target a specific rate but try to prevent "wild volatility."
Q6. I am a student planning to study abroad. How does this affect me?
The impact is direct. If your university fee is $50,000, at ₹70/$, it cost ₹35 Lakhs. At ₹90/$, the same fee costs ₹45 Lakhs. You will need to budget for a 20-25% increase in your education loan requirements.
Source Information: RBI & FBIL Database and Historical Archives (Feb 11, 2026)
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