Jupiter's free currency convertor is a simple and easy to use INR to USD and USD to INR currency converter. You can follow the steps below to convert Indian Rupees to United States Dollar at the latest exchange rate within seconds.
Currencies are traded in a global market known as the foreign exchange market. The rate at which one currency trades against the other is the exchange rate. The exchange rate is determined by the demand and supply forces of a currency. The rate changes every minute as the currencies are traded round the clock. A currency with high demand has more value than one with less demand. Alternatively, a currency with less supply also has a higher value than one with more supply.
Now that you know what an exchange rate is and how it is determined let's understand why US Dollar is a stronger currency than the Indian Rupee and their historical exchange rates.
Why is the value of the US Dollar greater than the Indian Rupees (INR)?
The US Dollar was born in 1792, but the first Dollar was not printed until 1914. Despite being a relatively new currency in the world, it is one of the strongest currencies. Below are the reasons why the US Dollar is a strong currency worldwide.
- Largest economy: The US economy became one of the world's largest economies by 1913 beating the UK. Though most transactions were still done through British Pounds, the US had the upper hand with respect to trade.
- The largest holder of gold: During World War I, countries started borrowing money from the US and purchased war supplies in the form of gold. This made the US the largest holder of gold in the world when the gold standard was still existent. In 1945, under the Bretton Woods System, all currencies were pegged to Dollars, while the Dollar was fixed to gold at $35 per ounce.
- Reserve currency: By the end of World War II, the US had the most gold reserves. Hence countries linked their currency to the USD, which in turn was linked to the gold. All transactions were made in USD, and all countries started accumulating dollars. Even after the Dollar was delinked from gold, US Dollar still remained as a reserve currency as most countries had their investments in Dollars.
Despite being the strongest, some currencies are still valued above the Dollar, for example, Euros, Pounds, and Kuwaiti Dinar. But why isn't Indian Rupee one of them? Why is the value of the US Dollar greater than the Indian Rupee?
Following are the reasons why US Dollar is greater in value than Indian Rupee:
India imports more from the US than the US imports from India. This leads to more outflow of dollars than inflow. Moreover, most of India's imports include oil and oil is usually traded in USD. As oil prices increase, Indian imports also go up, and India would need more dollars. India will shell out more rupees to buy dollars from the international currency market. The supply of Rupees will be more than its demand leading to a fall in its value against the Dollar.
Current account deficit
When India's exports are lower than its imports, it leads to a current account deficit. If they import more, they will need to pay more, and the demand for dollars increases against the Rupee, leading to a fall in the value of the Rupee. In contrast, if a country’s exports are high, it will receive more dollars for its goods and services, leading to an increase in the value of the Rupee. India has a current account deficit of USD 36.4 billion at the end of Q2 FY22-23. This is why US Dollar is a stronger currency.
Increasing interest rates in the US
To control high inflation, the US Federal Reserve has increased interest rates. High-interest rates will attract money from investors from different countries. The investment has to be made in the form of Dollars, and hence people will purchase more Dollars from the market to invest in the US market. This led to an increase in the value of the Dollar against the Rupee. Even when the interest rates were close to zero, countries invested in the US as it is the largest economy and hence considered safe.
How can the value of the Indian Rupee be increased compared to US Dollars?
The Indian Rupee can be appreciated compared to US Dollar in the following ways:
- High exports: High exports will increase the demand for domestic currency. If India’s exports increase, the demand for Rupee will automatically go up. This will increase the value of the Rupee against the US Dollar.
- Low imports: Low imports will reduce the foreign currency outflow. Hence India need not shell out more Rupees to buy Dollars. The demand for the Dollar falls against the Rupee resulting in an increase in the value of the Rupee.
- Monetary policy: The Reserve Bank of India (RBI) cannot directly control the Dollar vs INR conversion rate. However, it can influence the factors that affect demand and supply. If the Rupee is depreciating against the Dollar, to increase the value of the Rupee, RBI can pump Dollars into the market and buy back Rupees. This will increase the demand for Rupees and increase the supply of Dollars. As a result, the value of the Rupee will go up against the Dollar.
Who decides the INR to USD and USD to INR conversion value?
Most countries of the world follow the floating exchange rate system, including India and US. In a floating exchange rate system, the exchange rate is determined by the market demand and supply of the Rupee and US Dollar. Moreover, interest rate changes, economic outlook, and international competitiveness also influence exchange rates.
Government or central banks of a country cannot determine the exchange rate. However, they only influence the factors that affect the demand and supply of a currency.
INR to USD Historical Data
Here’s a table showing the Dollar vs INR conversion rate for the last 20 years.
Frequently Asked Questions
What is the highest ever USD to INR?
The Rupee depreciated to Rs 83.2042 against the USD on 20th October 2022. This was mainly driven by high crude prices, India's rising current account deficit, and high inflation in the country.
What was INR to USD in 1947?
One USD was around INR 4 in 1947. It remained constant until 1965 as the world followed Bretton Woods System and pegged their currency to the US Dollar. But when US president Richard Nixon delinked Dollar from gold, the entire world started following the floating exchange rate system and the value of the Rupee depreciated against the Dollar.
Can INR be equal to USD?
Indian Rupee can never be equal to US Dollar. If One Rupee equals One Dollar, then surely imports will be cheaper, and luxury goods will be less expensive. But India's exports will become costly, and countries will opt for cheaper substitutes leading to a fall in India's exports. Foreign investment will also reduce in the country. Moreover, India will face unemployment as labour will become costly in India. Global IT companies that have hired Indians to do a job will find other cheaper resources to get their job done. All this will lead to a recession in the country, and India's growth will fall drastically.
When was the Indian Rupee (INR) equal to US Dollar (USD)?
On 15th August 1947, the INR to US Dollar conversion rate was 1 INR – 1 USD. This was because India followed the par value system of the IMF. Later the exchange rate was pegged to USD, which was Rs 4/USD.
List of supported countries
Common currency conversion values at today’s exchange rate:
Commonly used currency terms are:
1 crore which has 7 zeroes - 1,00,00,000
1 Arab which has 9 zeroes - 1,00,00,00,000
1 Kharab which has 11 zeroes - 1,00,00,00,00,000
1 Neel which has 13 zeroes - 1,00,00,00,00,00,000
1 Padma which has 15 zeroes - 1,00,00,00,00,00,00,000
1 million which has 6 zeroes - 1,000,000 (Ten lakh in Indian common currency terms)
1 billion which has 9 zeroes - 1,000,000,000 (One Arab in Indian common currency terms)