Indian Currency Vs Others
Last 10 years performance review of INR against USD

by Editor

June 14, 2021

6 minute read

The U.S Dollar is not only the most traded but the most valuable currency in the world. It is valued at a higher level in international trade and exchange. U.S Dollar is a benchmark of money, as it determines the value of currencies in the global market.

The current value ranges from 64 INR to 77 INR. Most travelers exchange USD to INR and INR to USD for traveling purposes. 1 USD to INR in 1947, and following years were always low. The exchange rates keep fluctuating according to market conditions, so there is no fixed rate.

But, there is a reason for the scaling or decline of INR, which gives you a fair idea of performance. The review of INR against USD will let you know how much a currency is worth or valued in the last ten years.

Last 10 years performance review of INR against USD:-

2011 – A disastrous year for the rupee

The value of the rupee fell to an all-time low in 2011 due to domestic economic scenarios, sustained capital outflow, and unbending demand for the Dollar. The rupee fell at 54, broadly in the two-time period.

First, itfell from 43 to 47 in Jan and plunged to 54 in Aug. The poor foreign portfolio inflow also contributed to the fall. The scarcity of the Dollar was visible all through the year, which affected the value of the rupee.

2012 – A changed scenario

The huge trade deficit, lower capital inflows, current account deficit, devaluation pressure, and high inflation caused the rupee to fall in 2012. The rupee started on a good note in the first two months due to the Dollar inflow.  But it rebounded from 53 to 48. In May 2012, the value of the rupee depreciated over 25% from 44 to 55 against the dollar. At the end of the year, however, it stabilized to 55 per Dollarbut the trend in falling continued until the end.

2013 – Depreciation value in the year

In 2013, the value of the rupee depreciated. On May 22, 2013, INR was about 55/$, and within 15 days, it fell to 57/$. The main reason for the depreciation in the value was the surge in Dollar demand and imports.

There was a capital outflow by FII pulling out the debt market, which was a reason for a fall in value. Other economic factors also contributed to the fall in the rupee during 2013.

2014 – The fall and rise

There was a drop in the local market and a fresh Dollar demand, which led to a slight fall in the rupee. In the initial months, at interbank rates, the value of the rupee was 61 INR. At the end of the year, the RBI fixed the reference rate of the Dollar at 61 and the Euro at 85.

In the same year, the rupee dropped 102 against the pound. The inflows from the global market and elections in 2014 also played a major role in the value of the rupee.

2015 – The declining value

It was the same story in 2015 when the rupee depreciated over 5% against the dollar. Like the previous year, the rupee experienced losses, and the currency plunged at 2.2 during the same period. However, in Dec the value of the rupee was traded at 66. It was estimated that the rupee would further increase its value in the coming year against the dollar. There was a change in the forex trading market, which affected the value.

2016 – Demonetization

Demonetization bought a change in the Indian market. In 2016, the current Indian Govt took a major step to remove the old currency notes and exchange them with newer ones. There was a storm in the market due to this, and it also affected the share market.

Most experts argued on the step, and it resulted in controversies. However, on the positive side, it played a role in bridging the gap. In the following year, the INR was valued at 67 from 71. It bought a considerable change, but that could not sustain for long. It was one major step, which the Govt took in 2016.

2017 – The average year

The Indian rupee was at its weakest in Jan 2017. It closed to about 68 in May 2017 following uncertainty over elections in Karnataka. There was a 6.7% depreciation against the U.S dollar. However, this changed at the end of the year.

The Indian currency gained about 6% at the end of the year. Its value was 63 amid the surge in capital and other inflows. Also, the rupee did well in 2017 as the interest rates in the USA and Europe were all-time low. There was a cheap credit inflow in India in 2017.

2018 – A mixed bag year

In 2018, the currency weakened due to India’s macroeconomics factors. The strong demand for U.S dollars, rate hike, rise in crude oil, stock market movement were some factors that affected the rate in 2018. In Oct 2018, the Indian currency hit an all-time low against the dollar. In fact, in the same year, India was the worst performer due to a fall in the rupee. The experts expected the rupee to average at 69 in the same year.

2019 – The pre-pandemic time

The rupee weakened to 72 against the U.S Dollar in the first quarter of the year 2019. In fact, on a month-to-month basis, the value kept decreasing against the dollar. It depreciated to 4.60 in Aug 2019 and 3.10 in the same year. The worsening of china’s tensions with the U.S also contributed to the fall of the rupee. The rupee remained constant in the range of 71 and 72.

2020 – The year of the pandemic

The Indian rupee fell to nearly 3% against the U.S dollars. Despite record inflows from foreign investors, there was no change in the value. In April, it recorded a low of 76 against the dollar. But apart from the pandemic and economic uncertainties, it also appreciated by 3% in the same year. It was surely the worst performing year for the Indian rupee.

The current rate of 2021

The current rate of the Indian rupee is 72.89, but it keeps fluctuating daily. The value of INR depends on the crude oil prices. As the global oil price increases, the value of the Indian currency decreases. The withdrawal of foreign investors from the Indian market also affects the value of the currency. (Source)

Government debt is one factor that causes investors to lose interest in the Indian market, which results in inflation. These factors along with many other factors cause the value of the Indian rupee to fall on a global scale. Covid crisis has also been a factor in changing the value to an extent.

To Sum up,

The value of INR to USD determines many things. The international exchange rates give less money against INR. The value of the rupee was not the same during independence. But over the last ten years, there has been a fall and rise due to contributing factors. However, once the rate is constant, the global demand also picks up pace. The rupee could trade between the ranges of 72 to 74 this year.

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