Before we get into this comparison first, let’s understand a bit about USD or US. Dollar. Maybe in your daily life, you don’t need to convert your Indian rupees to US dollars. But when it comes to visiting a vacation to the United States or even some other countries that accept world currency, Gov. foreign exchange reservation, transaction, crude purchase, etc. this concept comes.
So, what is Global Currency?
A global currency is one that is accepted for trade throughout the world. Some of the world’s currencies are accepted for most international transactions. Example:- the U.S. dollar, the Euro, etc.
U.S. dollar is the World’s strongest global currency. But why?
The Bretton Woods agreement of 1944 established a new global monetary system. It replaced the gold standard with the U.S. dollar as the global currency. By so doing, it established America as the dominant power in the world economy.
It makes up over 60% of all known central bank foreign exchange reserves, as of 2019. Almost 40% of the world’s debt is issued in dollars. As a result, foreign banks need a lot of dollars to conduct business. As of 2018, the U.S. had $1,671 billion in circulation. As much as half that value is estimated to be in circulation abroad.
The financial crisis of 2008 made the dollar even more widely used. In 2018, the banks of Germany, France, and Great Britain held more liabilities denominated in dollars than in their own currencies.
The dollar’s strength is the reason governments are willing to hold the dollar in their foreign exchange reserves. As of 2019 China and Japan deliberately buy the currencies of their main export partners. The United States is the largest export partner in China, and second-largest in Japan.
Read more: U.K. invites India for 47th G7 summit.
Indian rupees vs, U.S. dollar
As of today 05/05/2021’ one U.S. dollar = 73.92 Indian rupees
This exchange rate has started all the way from our freedom in 1947. As a matter of fact, On 15th August 1947, the exchange rate between the Indian rupee and US Dollar was equal to one (i.e., 1 $= 1 Indian Rupee). Although In official records, 1 INR was never equal to 1 USD. Officially the exchange rate was started at 3.30′
See the table below to understand the path of the exchange rate from 1947 to date..
|Year|| Exchange rate |
(INR per USD)
There is a number of facts behind the weakness of rupees to date but in short, Since the time of Independence, Indian Rupee has been through a lot of situations that kept bringing down its value. Multiple Economic Crisis, Privatization, Devaluation, and loans from The World Bank played a role in determining the value of 1 USD to INR over and over again. Economic Crisis of 1966, 1991, 2016′ demonetization also played the role to fall our rupees value this much.