Rupee vs dollar

Rupee vs dollar

• 1.
  JOURNEY OF INDIANCURRENCY presented by: Suresh Devtulya RUPEE VS. DOLLAR
• 2.
  CONTENTS  History ofIndian rupee  Reasons of downfall  Effect on economy  Measures taken by government  conclusion
• 3.
  HISTORY OF INDIANRUPEE  Historically, the rupee(derived from Sanskrit word ‘raupya’) was a silver coin which traces back to 6TH century BCE.  ‘Raupya’ means stamped or impressed silver coin. India was one of the earliest issuers of coin in the world.  The silver rupee continued as the currency of India under British rule.  Earlier 1 rupee= 16 Anna, In 1957 the rupee was decimalized and divided into 100 nay paisa.  Indian notes are printed in 1, 2, 5, 10, 50, 100, 500, 1000 denominations and coins in 50 paisa, 1, 2, 5, 10.  No. of notes to be printed is decided by RBI
• 4.
  DOWNFALL OF INDIAN CURRENCY At the time of independence(1947) rupees was at par with dollar. 1 $ = 1 rupee  Introducing five year plans in 1951forced the government to take external borrowings, which required devaluation of currency. From 1948- 1966, 1 $ = 5 rupee  Indo-sine war(1962) and Indo-pak war(1965) led to further borrowings for defense expenses.  The drought of 1966 totally broke the Indian economy, and India was forced to devalue its currency for further loans in 1967, 1$ = 7.57 rupee
• 5.
   In 1975,1$ = 8.39 rupee  1985, it further devalued to 12 against dollar.  In 1991 Indian economy was in grip of high inflation, low growth and foreign reserves were not even worth to meet three weeks of import.  The currency had to be devalued again to 17.90, pressure from IMF and USA.  In 1993, currency was opened to flow freely and the currency was now dependent on market shares. This reduced rupee to 31.37 against dollar.  Since then Indian currency has depreciated regularly.  Currently the value of rupee is running record low
• 6.
  REASONS OF DOWNFALL To increase the manufacturing strength of the country, most of the money was used in industries which resulted in unstable economy.  Current account deficit as imports are way more than the exports.  Very less Cash inflow and low foreign exchange  increase in oil prices, which leads to more Indian rupee being spent on oil.  Downgrading of Indian stocks.  Withdrawal of investors.
• 7.
  EFFECT ON ECONOMY Rise in inflation in India  Blow to Indian importers  Negative impact on Indian students and travelers abroad.  Oil imports will be highly affected.
• 8.
  MEASURES TAKEN BY GOVERNMENT Foreign direct investment (FDI) will increase the flow of foreign currency to India.  Reduce dependency on foreign oil, through domestic and renewable energy.  Financial controls, e.g. limiting the amount of gold imports to reduce the current account deficit.  To reduce imports by using indigenous products.
• 9.
  CONCLUSION  Currently theeconomic conditions in India is very unstable.  Inflation is increasing reaching nearly 10% in 2013.  So, its high time for the government to take immediate steps to curb these problems.  Our manufacturing sector should be competitive enough for the world leading companies.  We should move from a capital- intensive manufacturing to labor- intensive manufacturing so that more and more people are employed and GDP of the country increases.