New Delhi: This is a popular outrage these days on Social Media that how the Indian rupee was equal to 1 US dollar on 15th, August 1947. Unfortunately, it is not correct. Exchanging 1 USD to INR in 1947 would not have got you 1 Rupee exactly. In 1947 when India got its independence, there were no outside borrowings on the balance sheet of India thus the value of India Rupee was at parity with US Dollar. Since India was under British rule Rupee was pegged to Pounds. From 1927 to 1966, it was 13 rupees = 1 pound. This arrangement continued until 1966 when the rupee was devalued and pegged to the U.S. dollar at a rate of 7.5 rupees = 1 dollar. This value lasted until the U.S. dollar devalued in 1971.
So what was 1 USD to INR in 1947 exactly worth?
At independence, the Indian rupee was pegged to the British pound at a rate of 1 rupee = 1 shilling and 6 pence or 13 1/3 rupees per British pound. The British pound would have been worth about 4 USD at that point in time – thus the U.S. Dollar would have been worth more than 3 rupees.