A generally accepted form of money Includes coins and paper notes and are issued by a government Used as a medium

of exchange for goods and services. Each country has its own currency Eg. Switzerland's official currency is the Swiss franc, and Japan's official currency is the yen. An exception would be the euro, which is used as the currency for several European countries.

The Indian rupee(sign: ) is the official currency of the Republic of India. The issuance of the currency is controlled by the Reserve Bank of India. Banknotes in circulation come in denominations of 5, 10, 20, 50, 100, 500 and 1000. Rupee coins are available in denominations of 1, 2, 5, 10.

Historically, the rupee (derived from the Sanskrit word raupya), was a silver coin The history of the Indian rupee traces back to Ancient India in circa 6th century BC Ancient India was one of the earliest issuers of coins in the world, along with the Chinese wen and Lydian staters.

Dates

Currency system

From 1835

1 rupee = 16 annas = 64 paise

From 1 April 1957

1 rupee = 100 naya paise

From 1 June 1964

1 rupee = 100 paise

The exchange rate between two countries is the rate at which one currency can be exchanged for another. For example, an interbank exchange rate of 91 Japanese yen (JPY, ) to the United States dollar (US$) means that 91 will be exchanged for each US$1.

The exchange rate of Rupee is the rate at which Rupee can be converted into another currency. Eg. The exchange rate of British Pound Sterling to Indian Rupee equals 100.61. The U.S. dollar is the world's most dominant reserve currency. So we mostly consider exchange rate of rupee to dollar.

1947 Rupee at par with Dollar as there were no foreign borrowings. 1951 - Introduction of the Five-Year Plan for which the government started external borrowings which devaluated the rupee. 1948-1966 - India choose to adopt a fixed rate currency regime. The rupee was pegged at 4.79 against a dollar. 1966 Wars with China in 1962 and one with Pakistan in 1965, resulted in a huge deficit on India's budget, forcing the government to devalue the currency to 7.57 against the dollar. 1971 - The rupee's link with the British currency was broken and it was linked directly to the US dollar.

1975 - The Indian rupee was linked to three currencies, US dollar, Japanese yen and German mark. The value of the Indian rupee was pegged at 8.39 against a dollar. 1985 - Rupee was further devalued to 12 against a dollar. 1991 - India faced a serious balance of payment crisis following which the rupee was devalued to 17.90 against a dollar. 1993 - Rupee was let free to flow and exchange rate was freed to be determined by the market. Rupee was devalued to 31.37 against a dollar. 2000-2010 - The rupee was traded in the range of 40-50 against a dollar. 28th Aug 2013 - Rupee hit a record low of 68.79 per dollar.

10.0

15.0

20.0

25.0

30.0

35.0

45.0

50.0

40.0

55.0

5.0 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76

1976-77
1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89

1989-90
1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

Dollar Vs Rupee

2007-08
2008-09 2009-10 2010-11

Market sentiments Speculation RBI Intervention Imports and Exports Interest Rates

1966 Economic crisis 1991 Economic crisis Revaluation(20002007) 2013 Depreciation

Basic law of economics Price of crude oil Performance of dollar Volatility in the equity market Poor current account deficit Withdrawal of investors Contraction of Indian economy

Oil import demand could be staggered and purchases coordinated so that at no point there is undue bundling of imports. The government can take initiatives which encourage and increase the flow of foreign investments into India. The government can make investments attractive and invites long term FDI debt funds in infrastructure sector. Government can consider temporary import compression. FDI in the aviation industry, retail can also attract foreign investors.

Lets aim towards it