How many Times has the Indian Rupee Been Devalued?
By BYJU'S Exam Prep
Updated on: November 14th, 2023
The Indian rupee has been devalued three times by the government of India in the past. Due to a shortage of funds within the government, the value of the Indian rupee was reduced in 1949. Due to the war with China and Pakistan in 1966, the Indian rupee was devalued. The Indian government once more devalued the rupee in 1991 during a financial crisis.
Table of content
Devaluation of Currency in India
In macroeconomics and contemporary monetary policy, a devaluation is the formal setting by a monetary authority of a lower exchange rate for the national currency in relation to a foreign reference currency or currency basket in a fixed-exchange-rate system. Devaluation is the intentional reduction in the value of a nation’s currency.
- The currency’s value may be reduced at the government’s discretion.
- Depreciating a currency lowers the cost of exports and can aid in reducing trade deficits.
- Devaluing a currency can be beneficial during such a time when an economy is paralyzed due to a variety of factors.
- The value of the Indian rupee was devalued on numerous occasions in the past, and these actions eventually improved both the economy and the value of the currency.
- Due to a lack of funds, the Indian government devalued the rupee in 1949, 1966, during the war with China and Pakistan, and in 1991, during an economic downturn.
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