एक रूपये का डॉलर!!

“आप मुझे एक रूपये का डॉलर दो, मैं आपको पॉंच रूपयेका डॉलर देता हॅुं” tea vendor said to me in my office, when I ushered 10 Rupee note. I was amused when I heard this. But we frequently hear this when people erroneously equate coin with dollar. His utterance provoked me to see the history of Indian Rupee.

Rupiya is derived from “Rupe” mean Silver or “Rupa” means image or one can also interpret it as image on silver. Indian Rupee had been silver coin based currency for long. To my surprise, Indian Rupee was equal to US$ until 1947. The first major devaluation of Indian rupee happened in 1949. It is very difficult to pass any judgment on this because I have not studied economics. But it is very evident that international politics forced Nehru to accept this. At the same time, there are varied and exactly opposite views on the merits and demerits of this event. Therefore, I leave it to readers to draw their own inferences.

From 1926 to 1966 Indian rupee was pegged to GBP at Rs. 13.33. The pegging was changed to US$ in 1966 at Rs. 7.56. India gone away with the pegging system slowly during Narasimha Rao’s regime. Today, Indian Rupee is completely market linked and its value is driven by market. It means theoretically GOI or RBI does not control it but practically they do it indirectly. Please see the following table which gives exchange rate with US$. I leave it to readers to draw their own conclusions after going through the data!!  

Year	Exchange Rate $	Devaluation	PM
1947	1	0	Nehru
1950	4.79	379%	Nehru (devaluated  in 1949)
1955	4.79	0%	Nehru
1960	4.77	0%	Nehru
1965	4.78	0%	Nehru (64), Indira (66-77)
1970	7.56	58%	Indira
1975	8.39	11%	Indira, Desai, Charan Singh
1980	7.86	-6%	Indira (80-84)
1985	12.36	57%	Rajiv (84-89), Chandrashekhar, VP Singh
1990	17.5	42%	Narasimha Rao (91-96)
1995	32.42	85%	Gujral, Gowda, Vajpayee
2000	44.94	39%	Vajpayee (98-04)
2005	43.47	-3%	Manmohan Singh
2006	45.19	4%	Manmohan Singh
2007	39.42	-13%	Manmohan Singh
2008	48.88	24%	Manmohan Singh
2009	46.37	-5%	Manmohan Singh
2010	46.21	-0.35%	Manmohan Singh
2013	68	47%	Manmohan Singh
Feb-2014	62.27	-9%	Manmohan Singh

 

One Rupee note is issues by Govt. of India whereas rest of the currency notes are issued by Reserve Bank of India. Indian Rupee has another interesting history. Indian Rupee has been official currency for countries like Seychelles, Kenya, Uganda and Mauritius. Persian Gulf countries like Dubai, Kuwait, Bahrain, Qatar, Muscat, and Oman were using Indian Rupee as their currency till 1959. But, it promoted gold smuggling and put pressure on India’s foreign reserves. Therefore, GOI issued Gulf Rupee exclusively for these countries in 1959. Indian Rupee suddenly devaluated in 1966. As a result these countries started replacing Gulf Rupee with their own currency. Oman replaced it at the end in 1970.