Rupee against USD before and after 2014
Rupee against USD before and after 2014
The Indian Rupee experienced a drop in the last quarter of 2014. The fall was mainly due to the depreciation of the Indian currency. However, even after this decline, it is still collectively considered the strongest currency in Asia, along with China and Japan. In comparison, American dollars is considered one of the weakest currencies in Asia and the world.
In the first quarter of 2014, the exchange rate between the US dollar and the Indian currency was 57.6 rupees for 1 US dollar. It later depreciated by 8% and closed at Rs 60.8 per USD in June 2014. The depreciation accelerated after mid-July when it led to Rs 68 and reached a high of Rs 68.7 for 1 USD in October. 2014, marking a 15% depreciation against the American currency over a period of 3 months (July – October).
The currency reached its peak depreciation of 22.5% in December 2014, when it hit 74 rupees per US dollar. The depreciation was not sudden but gradual and stable, with the value of the Indian rupee rising slightly towards the end of the month. The depreciation could have been higher, but the intervention of the Reserve Bank of India after mid-September and its decision to maintain a stable and aggressive exchange rate led to a slight depreciation of almost 8% in the last quarter of 2014 .
The Indian rupee had been admired by nearly 25% in 2013 against the US dollar, rising from a low of 55 rupees in January 2013 to a high of 55.5 rupees in December 2013. On April 7, 2014, the Indian rupee closed at a record high of Rs. 61.26 per dollar, against its previous high of 61. back to its previous levels with an appreciation of around 3%.
The rupee fell 1.6% against the US dollar in November 2014 and another 1.8% in December 2014. The rupee closed at 62.32 rupees on December 23, 2014, giving an 8% appreciation to Indian currency against the US dollar during November 2014. In comparison, the Dollar Index, which tracks the US dollar against a basket of other currencies, rose 1.4% over the same period. Thus, in December 2014, the Indian rupee was valued 3% against other major currencies and 8% against the US dollar in November 2014.
The Indian rupee experienced a memorable appreciation in the last quarter of 2014. The Indian rupee gained 1.5% against the US dollar in October 2014 and 3.2% in November 2014, putting it at its highest levels for the two months since January 2008. The rupiah’s gains were maintained and even intensified in December, when it appreciated a further 2.0% against the US dollar.
The rupee closed at a record high of 62.9 per US$1 on December 6, 2014, its highest level since January 2, 2008. One of the main reasons for this appreciation is the strength of the Indian economy, which rebounded on the back of soaring stock indices and trade data, coupled with increased demand for export-oriented Indian IT services worldwide. RBI policy rates remained unchanged at 7.
During the last quarter of 2014, the Indian rupee saw a significant decline from its all-time highs as it depreciated by nearly 10% in this period alone. The rupee had closed at 62.59 to the US dollar on September 5, 2014, the highest level for that month since January 2008. The rupee’s depreciation began in the last quarter of 2014. It continued until December until it hit a low of 70.83 on December 28, 2014, nearly 30% depreciation against the USD since September 2014.
In November 2014, the dollar appreciated by almost 2% against the main currencies, with the exception of the rupee. This is mainly due to the interest rate hike by the US Fed and also because the view of the global market is still not very positive. In September, the dollar index weakened by about 5% as Fed Chair Janet Yellen said the Fed would not raise interest rates until 2015. The dollar index, which measures the strength of the dollar against the other six major currencies, closed at 80.46 on December 28. 2014, which was 1.
India is a net importer of oil and the country imports almost 80% of its crude oil needs. The Indian rupee has depreciated sharply in recent months, which has increased the oil import bill by more than 20% compared to a year ago. The Indian currency hit its all-time low against the dollar on July 29, 2013. It touched 69.13, down 18% since then, changing hands at around Rs 65 to the dollar.
The Indian Rupee is traded in two ways throughout the day. First, it is traded in the interbank market known as “spot market” where traders buy and sell rupees against other currencies, while second, it is traded in the “contract market” where traders buy and sell rupees. rupees against themselves. However, only exporters can trade in rupees through the “spot market”.
The Reserve Bank of India offers a free email newsletter on its website to keep people well informed about its interest rates, exchange rate strategy, and different other developments that affect the value of money. The rupee is structurally called not in a local currency but in the Indian currency. Thus, the value of the rupee (in terms of the “national” currency) depends on the strength or weakness of the respective national currency against which it is exchanged. The Bank issues new banknotes each year to meet demand, and there is also a series of banknotes that are no longer in circulation.
The Indian Rupee is also used in some overseas markets. For example, the US dollar is also used to value Indian exports and imports when they are traded in the international market against the currencies of other countries. Trade between nations is represented by the total value of exports and imports. This combined perimeter is called the trade balance. The chart shows a strong correlation between exports and the value of the rupee against the US dollar, which means that if the rupee depreciates against the dollar, exports will increase and if the rupee appreciates, exports will decrease.
HISTORY OF THE INDIAN RUPE
First of all, the currency used in India was of English origin. They were called “East India Company Rupee”. After its independence in 1947, India followed the British monetary system. The value of a rupee was only one shilling and sixpence (1s 6d) until 1950, and it was adopted as 100 naye paise in 1953. In 1964 decimalisation (in terms of law) was took place and introduced a new currency with denominations up to 10,000.
In 1971, an amendment to the law was made and the Indian currency was converted into five new coins and two new notes of 5,000 paise and 1,000 paise. In 1978 a new legal system was introduced introducing a new series of coins and notes with denominations of 1, 2, 5 and 10 as well as 100 paise. A set of smaller denomination coins (1/2p, 1p and 2p) were also introduced between 1981 and 1982.
A currency board is a monetary system based on the value of local currency against the US dollar. The Indian rupee is a de jure currency board, as it is fixed and pegged to the US dollar at a rate of Rs1=$1. Recently there have been calls for the abolition of this arrangement and the introduction of a floating exchange rate regime for the Indian currency as well as other countries in Asia and beyond.
The Indian Rupee (INR) is the official currency of the Republic of India. It is the seventh most traded currency in the world and the third reserve currency in circulation, accounting for 4.7% of total foreign exchange reserves. The value of the Indian rupee was pegged to a basket of currencies that included the US dollar, euro and Japanese yen in 1994–95, to stabilize its exchange rate.
A currency board (CB) is a monetary system in which the central bank fixes the value of its currency to that of another country’s currency, usually the US dollar. The Indian rupee is a de facto currency board; its fixed value against foreign currencies prevents it from floating freely. India had a tight monetary policy since 1991, when the Indian government pledged to control inflation and maintain an upper limit on the Reserve Bank of India (RBI) interest rate.
Edited by Prakriti Arora