The rupee has had a remarkable journey of ups and downs as it has moved from a post-independence value of 3.30 to a dollar to breaching the 90-mark on 3 December 2025.

Breaking free from the British colonial rule, the Indian currency at the time of Independence was actually linked to the pound and not the dollar. The rupee exchange rate in 1947 worked out to 3.3 a dollar.

There was no range to move as the exchange rate was administratively fixed for years after Independence. For the rupee, it was a slow but steady slide against the dollar, moving to 4.76 in 1950 and then devaluing to Rs 7.50 in 1966 after droughts and a balance-of-payments crunch. Preceding that, India had fought a war with China in 1962 and another with Pakistan in 1965.

The rupee's link with the British currency snapped in 1971 and it was linked directly to the US dollar.

In 1975, the rupee was at 8.39 against a dollar and then dropped to Rs 10 in 1983 and further to 12 in 1985. It tumbled to 17.5 per dollar in 1990 due to early liberalisation pressures. Amid the balance-of-payments crisis and liberalisation phase in 1991, it devalued to 22.7 in 1991 as the country was in the grip of high inflation and low growth.

The next landmark year was 1993 when the currency was freed to be determined by the market and the RBI could intervene to defend it against extreme volatility. The currency was devalued to 31.37 against a dollar.

Then came the Asian financial crisis and it slipped to 40 per dollar by 1998. It crossed 45 in 2000 and fell past 50 during the global financial crisis in 2008. The ‘taper tantrum’ (market panic caused by short-term fears that the US Federal Reserve will reduce its bond purchases) took it to 56.6 and then to 60 in 2013, the year before Narendra Modi took office as Prime Minister.

The rupee slipped past 70 in 2018 due to oil and global risk. and in 2022 it touched 81.35 on account of global inflation and a strong dollar cycle.

In 2024, the average rate was close to Rs 84.8 per dollar amid persistent current account and outflow pressures.

The current year has been marked by capital outflows, tariffs and trade deficit widening as it has hovered around the 88-89 range. Then came the 3 December plunge and it breached the 90 level for the first time.

RBI Governor Sanjay Malhotra has said that the central bank has no fixed target for the rupee to settle at and the Indian currency should find its own level.