Indian Rupee (INR)

 

A Brief History of the Indian Rupee (INR)

The history of the Indian rupee dates back to circa 6th century BC, making ancient India one of the first issuers of coins in the world. In the following centuries as different empires rose and fell, India’s coins changed frequently (silver coins, gold coins, copper coins and lead coins).

The Indian rupee was considered the official currency of the Republic of India in the 16th century, introduced by Sher Shah Suri. In 1825, British India adopted a silver standard based on the rupee that was used, despite the silver crisis of 1873, until the 20th century.

Despite the fact India was a British colony until 1947; it never adopted the British Pound Sterling. At the end of British rule and on becoming a republic in 1950, all currencies from previous self-governing states within India were abolished and replaced with the Indian Rupee. The Indian Rupee also replaced the French Indian Rupee in 1954 and the Portuguese Indian Escudo in 1961, both of which were used as currency in India.

The Indian Rupee was a restricted currency until 1991, when the country began lifting restrictions. India instituted reforms allowing current account transactions that included remittances and interest payments, as well as capital asset based transactions. The currency attained partial convertibility in 1992.

In 1997, a panel was formed recommending the Indian Rupee’s full convertibility by the year 2000, but this plan was later abandoned in the wake of the 1997-98 Asian Financial Crisis. India has moved forward since 2006 towards the Indian Rupee’s full capital account convertibility. 

The Indian Rupee in the Global Foreign Exchange Market

The Indian Rupee ranks 15th among the most actively traded currencies in the foreign exchange market, accounting for 0.9% of the daily market trading volume.

The Indian Rupee trades most actively against the U.S. Dollar as the counter currency. In the FX market, this pair is typically known as Dollar Rupee. The Indian Rupee lacks a popular nickname in the market, so it is generally referred to as the Indian Rupee or just the Rupee.

Foreign nationals are not legally allowed to import or export Rupees from India due to currency controls, although locals are permitted a limited amount.

Also, the Indian Rupee’s exchange rate with respect to the U.S. Dollar is a managed float or de facto controlled exchange rate. The Reserve Bank of India routinely trades in the forex market in USD/INR to ensure relatively low volatility in that exchange rate.

Fact Table:

Currency Name: Indian Rupee
Currency Code: INR
Currency Symbol:
Central Bank: The Reserve Bank of India
Countries Used In: The Republic of India. Unofficially used in Bhutan and Nepal
Major Unit: One Indian Rupee
Minor Unit: One Paise = 1/100 of one Indian Rupee
Note Denominations: 1, 2, 5, 10, 20, 50, 100, 500 and 1000
Coin Denominations: 50 paise,1, 2, 5, 10, 50, 75, 100 and 1000.

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