Indian rupee: Difference between revisions

{{Infobox currency <!--from English WP -->

<!-- | currency_name_in_local = रुपया -->

| image_1 =

| image_title_1            = Indian Banknotes

| image_2                  =

| image_title_2            = Coins of various denominations

| image_3                  = Indian Rupee symbol.svg

| image_title_3            = Indian Rupee Symbol

| iso_code                 = INR

| using_countries          = [[India]]

|unofficial_users          = [[Bhutan]] (alongside the [[Ngultrum|Bhutanese Ngultrum]])<br />[[Nepal]] (in towns of Nepalese side of [[Nepal]]-[[India]] border, alongside the [[Nepalese Rupee]])

| inflation_rate            = 8.5%, August 2010

| inflation_source_date    = [http://eaindustry.nic.in/press_out.htm eaindustry.nic.in]

| inflation_method          = [[Wholesale price index|WPI]]

| pegged_by                = [[Bhutanese ngultrum]] (at par)<br />[[Nepalese rupee]] (1 INR = 1.6 NPR)

| subunit_ratio_1          = 1/100

| subunit_name_1           = [[Paisa]]

| subunit_name_2            = Formerly used symbols

| symbol                    = [[File:Indian Rupee symbol.svg|10px|link=Indian rupee sign]]

| symbol_subunit_1          = p

| symbol_subunit_2          = [[File:Indianrupeesymbols.svg]]

| nickname                  = Rupeyaa, paisa

| frequently_used_coins    = 1, 2, 5 Rupees

| rarely_used_coins        = 5, 10, 20, 25, 50 paise, 10 Rupees

| coin_article              = Modern Indian coins

| frequently_used_banknotes = 10, 20, 50, 100, 500, 2000 Rupees

| rarely_used_banknotes    = 1, 2, 5 Rupees

| issuing_authority         = Reserve Bank of India

| issuing_authority_website = www.rbi.org.in

| printer                  = Reserve Bank of India

| printer_website          = www.rbi.org.in

| mint                     = India Government Mint

The '''Indian [[rupee]]''' ({{lang-hi|रुपया}}) (sign: [[File:Indian Rupee symbol.svg|10px]] ; [[ISO 4217|code]]: '''INR''') is the official [[currency]] of the [[Republic of India]]. The currency is issued and controlled by the Reserve Bank of India.<ref name="rbi">

The modern rupee is sub-divided into 100 ''[[paise]]'' (singular ''paisa''). The coins have values and of 5, 10, 20, 25 and 50 paise, as well as 1, 2, 5 and 10 rupees. The bank notes are available in values of 1, 2, 5, 10, 20, 50, 100, 200, 500 and 2000 rupees.

The Indian rupee symbol ([[File:Indian Rupee symbol.svg|10px]]) is an [[amalgam]] of both the [[Devanagari]] consonant "'''[[र]]'''" (Ra) and the [[Latin alphabet|Latin]] letter "R" without the vertical bar. The design was presented to the public by the government of India on 15 July 2010.<ref name="Final symbol">{{cite news

| url =http://timesofindia.indiatimes.com/biz/india-business/Cabinet-approves-new-rupee-symbol/articleshow/34807778346cms

| title =Cabinet approves new rupee symbol | date=2010-07-15

| access-date =2010-07-15 | publisher =Times of India}}

</ref>

The current abbreviation "INR" started in July 2010. Until then, the abbreviation "Rs" (or "Re") was used.

== Origin of name ==

The word "rupee" originates from the [[Sanskrit]] word रौप्य(raupya) meaning "silver" or "made of silver".<ref>[http://spokensanskrit.de/index.php?script=HK&tinput=%E0%A4%B0%E0%A5%8C%E0%A4%AA%E0%A5%8D%E0%A4%AF&country_ID=&trans=Translate&direction=AU Meaning of रौप्य (raupya)]</ref> Many Indian languages use this root word, for example,  రూపాయి (rūpāyi) in [[Telugu language|Telugu]], ரூபாய் (rūbāi) in [[Tamil language|Tamil]], रुपया (rupayā) in [[Hindi]], રૂપિયો (rupiyo) in [[Gujarati language|Gujarati]], ರೂಪಾಯಿ (rūpāyi) in [[Kannada]] and [[Tulu]], രൂപ (rūpā) in [[Malayalam]] and रुपये (rupaye) in [[Marathi]].

However, in [[West Bengal]], [[Tripura]], [[Mizoram]], [[Odisha]], and [[Assam]], the Indian rupee is officially known by names derived from the [[Sanskrit]] word टङ्क (Tanka) which means money.<ref>[http://spokensanskrit.de/index.php?script=HK&tinput=%E0%A4%9F%E0%A4%99%E0%A5%8D%E0%A4%95&country_ID=&trans=Translate&direction=SE Meaning of टङ्क (Tanka)]</ref> The rupee is called টাকা (Taka) in [[Bengali language|Bengali]], টকা (tôka) in [[Assamese language|Assamese]] and ଟଙ୍କା (Tanka) in [[Odia language|Odia]] and is written as such on Indian banknotes.<ref name="rbi_lang_panel">[http://www.rbi.org.in/currency/Language%20Panel%20on%20Notes.html Reserve Bank of India - Languages Panel on Indian banknotes]</ref>

== Symbol ==

On March 5, 2009, the Government of India announced a contest to create a symbol for the rupee.<ref>[http://finmin.nic.in/the_ministry/dept_eco_affairs/currency_coinage/Comp_Design.pdf COMPETITION FOR DESIGN]</ref><ref name="HT symbol">{{cite news |url =http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=HomePage&id=c8097698-a806-4cc2-8c67-668d594057dc&Headline=India+seeks+global+symbol+for+rupee

|title =India seeks global symbol for rupee

|publisher=Hindustan Times}}</ref> During the 2010 Union budget of India, Finance Minister Pranab Mukherjee mentioned that the proposed symbol would reflect and capture the Indian [[ethos]] and culture.<ref name="PTI symbol">{{cite news

| url =http://sify.com/finance/budget-symbol-for-indian-rupee-news-budget-kc0pkgacdbj.html

| title=Cabinet defers decision on rupee symbol |date=2010-06-24

| access-date=2010-07-10 | publisher=Sify Finance}}

</ref> Five symbols were shortlisted,<ref name="shortlist symbol">{{cite web

| url= http://finmin.nic.in/the_ministry/dept_eco_affairs/infrastructure_div/message_symbol_final.asp

| title=List of Five Entries which have been selected for Final

| access-date=2010-07-15 | publisher=Ministry of Finance, India}}

</ref> and the Cabinet selected the definitive symbol created by D. Udaya Kumar on July 15, 2010.<ref name="Final symbol"/> The symbol is derived from a combination of the Devanagari letter ‘र’ and English letter ‘R’. The parallel lines at the top (with white space between them) make an allusion to the [[Indian flag|tricolor]] and also depict an equality sign which symbolizes the nation's desire to reduce economic disparity.<ref name="Rupee Symbol">{{cite news

| url =http://www.indianexpress.com/news/rupee-symbol/646761

| title=IIT post-graduate gives Rupee its symbol |date=2010-07-15

| access-date=2010-07-15 | publisher=Indian Express}}

</ref> The Indian government has plans to adopt the symbol within six months in the country and globally within 18 to 24 months.<ref name="Final symbol"/><ref>{{cite web|url=http://www.theworldreporter.com/2010/07/indian-rupee-joins-elite-currency-club.html |title=Indian Rupee Joins Elite Currency Club  |publisher=Theworldreporter.com |date=2010-07-17 }}</ref> Before the adoption of the symbol, the most commonly used symbols for the rupee were '''Rs''', '''Re''' or if the text was in an Indian language, then an appropriate abbreviation in that language.

== Numeral system ==

In [[Indian English]], values at or above a hundred thousand Indian rupees are counted in terms of [[lakh]]s (one lakh = hundred thousand) and [[crore]]s (one crore = ten million). For example, the amount [[File:Indian Rupee symbol.svg|10px]]3,25,84,729.25 is read as three crores, twenty-five lakhs, eighty-four thousand, seven hundred and twenty-nine rupees and twenty-five paise. The use of million or billion, as is standard in [[American English|American]] or [[British English]], is not very common.

== History ==

=== Use in India ===

[[File:Sher shah's rupee.jpg|right|250px|thumb|''[[Rupiya]]'' released by [[Sher Shah Suri]], 1540–1545]]

[[File:Indian silver rupee of 1918.JPG|thumb|right|230px|Silver rupee of the [[British Indian Empire]], 1918]]

India was one of the earliest issuers of coins (circa 6th century BC). The first "[[rupee]]" is believed to have been introduced by [[Sher Shah Suri]] (1486–1545), based on a ratio of 40 copper pieces (paisa) per rupee.<ref>ADVFN: [http://www.advfn.com/currencies/inr/about/IndianRupee.html ''Indian Rupee'']</ref> Among the earliest issues of paper rupees were those by the ''Bank of Hindustan'' (1770–1832), the ''General Bank of Bengal and Bihar'' (1773–75, established by [[Warren Hastings]]) and the ''Bengal Bank'' (1784–91), amongst others. Until 1815, the [[Madras Presidency]] also issued a currency based on the [[Madras fanam|fanam]], with 12 fanams equal to the rupee.

Historically, the rupee, derived from the [[Sanskrit]] word raupya, which means ''silver'', was a silver coin. This had severe consequences in the nineteenth century, when the strongest economies in the world were on the [[gold standard]]. The discovery of vast quantities of silver in the U.S. and various European colonies resulted in a decline in the [[relative value]] of silver to gold. Suddenly the standard currency of India could not buy as much from the outside world. This event was known as "the fall of the rupee".

India was not affected by the imperial order-in-council of 1825 that attempted to introduce the British [[Pound sterling|sterling]] coinage to the British colonies. [[British India]] at that time was controlled by the [[British East India Company]]. The silver rupee continued as the currency of India throughout the entire period of the [[British Raj]] and beyond. In 1835, British India set itself firmly upon a mono-metallic silver standard based on the rupee. His decision was influenced by a letter, written in the year 1805, by [[Lord Liverpool]] that extolled the virtues of mono-metallism.

Following the [[Indian Mutiny]] in 1857, the British government took direct control of British India. Since 1851, gold sovereigns were being produced in large numbers at the [[Royal Mint]] branch in [[Sydney]], [[New South Wales]]. In the year 1864 in an attempt to make the British [[gold sovereign]] become the 'imperial coin', the treasuries in [[Bombay]] and [[Calcutta]] were instructed to receive [[gold sovereign]]s. These gold sovereigns however never left the vaults. As was realized in the previous decade in Canada and the next year in [[Hong Kong]], existing habits are not easy to replace. And just as the British government had finally given up any hopes of replacing the rupee in India with the pound sterling, they simultaneously realized, and for the same reasons, that they could not easily replace the [[trade coin|silver dollar]] in the [[Straits Settlements]] with the Indian rupee, as had been the desire of the British East India Company.

Since the great silver crisis of 1873, a growing number of nations had been adopting the gold standard. In 1898, following the recommendations of the [[Indian Currency Committee]], British India officially adopted the [[gold exchange standard]] by pegging the rupee to the British [[pound sterling]] at a fixed value of 1 [[shilling]] 4 [[penny|pence]] (i.e., 15 rupees = 1&nbsp;pound). In 1920, the actual silver value of the rupee was increased in value to 2 shillings (10 rupees = 1&nbsp;pound). In [[British East Africa]] at this time, the decision was made to replace the rupee with a [[East African florin|florin]]. No such opportunity was, however, taken in British India.

In 1927, the peg was once more reduced, this time to 18 pence (13⅓ rupees = 1&nbsp;pound). This peg was maintained until 1966, when the rupee was devalued and pegged to the U.S. dollar at a rate of 7.5 rupees = 1 dollar (at the time, the rupee became equal to 11.4 British pence). This peg lasted until the U.S. dollar devalued in 1971.

The Indian rupee replaced the [[Danish Indian rupee]] in 1845, the [[French Indian rupee]] in 1954 and the [[Portuguese Indian escudo]] in 1961. Following independence in 1947, the Indian rupee replaced all the currencies of the previously autonomous states. Some of these states had issued rupees equal to those issued by the British (such as the [[Travancore rupee]]). Other currencies included the [[Hyderabad rupee]] and the [[Kutch kori]]. The nominal values during British rule (and the first decade of independence) were:

* 1 damidi(pie) = 0.520833 paise

In 1957, [[decimalisation]] occurred, and the rupee was divided into 100 ''naye paise'' (Hindi for "new paise"). In 1964, the initial "naye" was dropped. Many still refer to 25, 50 and 75 paise as 4, 8 and 12 annas, respectively, not unlike the usage of "[[Bit (money)|bit]]" in American English for ⅛ dollar.

File:1 rupee bill historical.jpg | The One Rupee Banknote, now not in use.

File:in2av.jpg | The two-rupee banknote

File:French1rupee.jpg | French Indian 1 rupee (1938)

File:Rupee_One_-_Obverse.jpg | One rupee&nbsp;— Obverse

=== The rupee on the East African coast and South Arabia ===

In [[East Africa]], [[Arabia]], and [[Mesopotamia]], the Rupee and its related coins were current at various times. The usage of the Rupee in East Africa extended from [[Somalia]] in the north, to as far south as [[Natal]]. In Mozambique, the British India rupees were overstamped. In Kenya, the [[British East Africa Company]] minted the rupee and its fractions as well as pice. The rise in the price of silver, immediately after the First World War, caused the rupee to rise in value to two shillings [[sterling]]. In 1920 in [[British East Africa]], the opportunity was then taken to introduce a new [[Two shillings (British coin)|florin]] coin, hence bringing the currency into line with sterling. Shortly after that, the Florin was split into two [[East African shilling]]s. This assimilation to sterling did not however happen in British India itself. In Somalia the Italian colonial authority minted 'rupia' to exactly the same standard, and called the pice 'besa'.

=== The rupee in the Straits Settlements ===

The [[Straits Settlements]] were originally an outlier of the [[British East India Company]]. The [[Spanish dollar]] had already taken hold in the Straits Settlements by the time the British arrived in the nineteenth century, however, the East India Company tried to introduce the rupee in its place. These attempts were resisted by the locals, and by 1867 when the British government took over direct control of the Straits Settlements from the East India Company, attempts to introduce the rupee were finally abandoned.

=== International use ===

{{Other pages|Pakistani rupee}}

With [[Partition of India|Partition]], the [[Pakistani rupee]] came into existence, initially using Indian coins and Indian currency notes simply overstamped with "Pakistan". In previous times, the Indian rupee was an official currency of other countries, including [[Colony of Aden|Aden]], [[Oman]], [[Kuwait]], [[Bahrain]], [[Qatar]], the [[Trucial States]], [[Kenya]], [[Tanganyika]], [[Uganda]], the [[Seychelles]], and [[Mauritius]].

The Indian government introduced the [[Gulf rupee]], also known as the Persian Gulf rupee (XPGR), as a replacement for the Indian rupee for circulation exclusively outside the country with the Reserve Bank of India [Amendment] Act, 1 May 1959. This creation of a separate currency was an attempt to reduce the strain put on India's foreign reserves by gold smuggling. After India devalued the rupee on 6 June 1966, those countries still using it – Oman, Qatar, and the Trucial States (which became the [[United Arab Emirates]] in 1971) – replaced the Gulf rupee with their own currencies. Kuwait and Bahrain had already done so in 1961 and 1965 respectively.

The [[Bhutanese ngultrum]] is pegged at par with the Indian rupee, and both currencies are accepted in [[Bhutan]]. The Indian rupee is also accepted in towns in [[Nepal]] which lie near the border with India. However, the Indian Rupee denominations of 500 and 1000 are banned in Nepal.

Officially, the Indian rupee has a market-set exchange rate. However, the RBI trades actively in the USD/INR currency market to impact [[Trade weighted index|effective exchange rates]]. Thus, the currency regime in place for the Indian rupee with respect to the [[US dollar]] is a ''[[de facto]]'' controlled exchange rate. This is sometimes called a ''managed'' float. Other rates such as the EUR/INR and INR/JPY have volatilities that are typical of floating exchange rates.<ref>[http://icrier.org/pdf/wp108.pdf "Convertibility: Patnaik, 2003"] (PDF)</ref> It should be noted, however, that unlike [[People's Republic of China|China]], successive [[Government of India|administrations]] (through [[Reserve Bank of India|RBI]], the central bank) have not followed a policy of ''pegging'' the INR to a specific foreign currency at a particular exchange rate. RBI intervention in currency markets is solely to deliver low ''volatility'' in the exchange rates, and not to take a ''view'' on the rate or direction of the Indian rupee in relation to other currencies.<ref>[https://www.bloomberg.com/apps/news?pid=20601080&sid=alS4DteWrtco&refer=asia "'Neither the government nor the central bank takes a view on the rupee (exchange rate movements), as long as the movement is orderly', says Indian Minister of Finance"]</ref>

Also affecting convertibility is a series of [[customs]] regulations restricting the import and export of rupees. Legally, foreign nationals are forbidden from importing or exporting rupees, while Indian nationals can import and export only up to 5000 rupees at a time, and the possession of 500 and 1000 rupee notes in [[Nepal]] is prohibited.

RBI also exercises a system of [[capital control]]s in addition to the intervention (through active trading) in the currency markets. On the current account, there are no currency conversion restrictions hindering buying or selling foreign exchange (though trade barriers do exist). On the capital account, foreign institutional investors have convertibility to bring money in and out of the country and buy securities (subject to certain quantitative restrictions). Local firms are able to take capital out of the country in order to expand globally. But local households are restricted in their ability to do global diversification. However, owing to an enormous expansion of the current account and the capital  account, India is increasingly moving towards ''de facto'' full convertibility.

There is some confusion regarding the interchange of the currency with gold, but the system that India follows is that money cannot be exchanged for gold, in any circumstances or any situation. Money cannot be changed into gold by the RBI. This is because it will become difficult to handle it. India follows the same gold-interchange principle as Great Britain and America.

* 1991 - India began to lift restrictions on its currency. A series of reforms remove restrictions on current account transactions including trade, interest payments & [[remittance]]s and on some capital assets-based transactions. Liberalized Exchange Rate Management System (LERMS), a dual exchange rate system, introduced a partial convertibility of the Rupee in March 1992.<ref>Rituparna Kar and Nityananda Sarkar: ''Mean and volatility dynamics of Indian rupee/US dollar exchange rate series: an empirical investigation'' in Asia-Pacific Finan Markets (2006) 13:41–69, p. 48. DOI 10.1007/s10690-007-9034-0 .</ref>

* 1997 - A panel set up to explore capital account convertibility recommended India move towards full convertibility by 2000, but timetable abandoned in the wake of the 1997-98 East Asian financial crisis.

* 2006 - The [[Prime Minister]], Dr [[Manmohan Singh]], asks the Finance Minister and the [[Reserve Bank of India]] to prepare a road map for moving towards capital account convertibility.<ref>{{cite web

| title = The "Fuller Capital Account Convertibility Report"

| date = 2006-07-31

| url = http://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/72250.pdf

| access-date = 2009-01-23 }}

{{Reflist|2}}

== Further reading ==

* Bhimrao Ramji Ambedkar: ''The problem of the rupee: Its origin and its solution (history of indian currency & banking)'', Chapter 2, Rajagraha, Bombay, 7. Mai 1947

==Other websites==

* [http://www.ambedkar.org/ambcd/28A.%20Problem%20of%20Rupee_Preface.htm ''Problem of the Rupee''] . History of the Rupee till 1923&nbsp;AD

* [http://colnect.com/en/coins/list/country/1854 Images of historic and modern Indian coins]

{{DEFAULTSORT:Indian Rupee}}

[[Category:Currency of Asia]]

[[Category:Economy of India]]