On 16th Oct, 2008 I predicted that soon one dollar would become equal to 50 rupees. Just after one week, my prediction became correct. Now one US dollar is around 50 rupees. Now I think it is right time to tell you the history of Indian currency, rupee. The origin of the word “rupee” is found in the Sanskrit word rup or rupyah, which means “wrought silver,” originally “something provided with an image, a coin,” from rupah “shape, likeness, image.” Before independence, India was a land of hundreds of princely states. They used to run their own coins and currency notes.
After Independence in 1947, the Indian government brought out the new design Re. 1 note in 1949. The Lion Capital of Asoka was used for the design of that note.
Devaluation of Rupee started in 1960s due to war with China and Pakistan, large government budget deficits and drought there was problem of inflation in India. There was sharp rise in prices. So Indian Government was forced to start some liberal policies to stabilize the economy which finally resulted into huge devaluation of Rupee.
During mid eighties, India started having balance of payments problems and by the end of 1990, India was in serious economic trouble. Our foreign exchange reserves had dried up to the point that India could barely finance three weeks’ worth of imports. Once again, the government decided to devaluate the Rupee. By the start of 21st century, the Rupee stopped declining and stabilized at 45. However in mid-2007, the rupee started gaining strength one dollar came below 40 Rupees. Now again due to recent economic crisis in world economy, one dollar has started touching the historical figure of 50 Rupees.