The AUD has steadily appreciated against the rupee for many years. In 2000, the conversion rate was AUD to INR Rs28.5871. While the dollar’s value fluctuated slightly against the rupee for the next several years, it consistently climbed in value, even as India’s economy grew. Starting in the early 1990s, the Indian government introduced a series of economic liberalization measures, which included privatization of state-owned enterprises, reduced controls on foreign investment and trade, and deregulation of many industries. These measures helped to accelerate India’s growth, with the country’s growth rate averaging under 7% each year from 1997 to 2011. During this time period, the Australian dollar continued a steady increase in value against the INR, and by January of 2011 was trading at Rs45.5154.
In 2011, the Australian economy began to weaken, brought on by slower annualized growth rates. This decline in growth was attributed in part to a drop-off in mining investments, weakened consumer sentiment and consumption, and softening labor markets. India’s economic growth also began to slow in 2011. Higher interest rates, rising inflation, and investor pessimism regarding the global economy and the Indian government’s commitment to push through additional economic reforms led to a decline in investment in the country. By the end of 2012, the Indian government introduced a series of additional economic reforms, including allowing increased levels of foreign participation in direct investment, and a number of deficit reduction measures. The rupee, however, was still in a slide against the Australian dollar. The year finished with the AUD to INR conversion rate at Rs57.0504 to the dollar.