INR means Indian rupee (symbol: ₹) and is the currency of India.Rupee is divided into 100 paise (singular paisa), though no coins in these denominations have been minted since 1990.
A new rupee sign (₹) was officially implemented in 2010 created by fusing the Devanagari consonant “ra” with the Latin capital letter “R” without the vertical bar. The parallel lines at the top (with white space between them) are considered a reference to the tricolour Indian flag and a representation of the country’s intention to minimise economic inequity. It is also accepted as legal tender in Nepal and Bhutan who are close allies of India.
Indian currency: Etymology
- The word rupiya comes from the Sanskrit language.
- The term ‘Rupaya’ was used in mediaeval India during the reign of Sher Shah Sur, the founder of the Sur Empire.
- Following India’s partition in 1947, the Indian rupee was introduced into circulation. The annas were the smallest denominations of INR.
- In 1961, the rupee was decimalized, with one rupee equaling 100 paise.
- India’s currency is now managed float, meaning it is not fixed to the US Dollar or any other currency.
Indian currency: Banknotes
The Indian paper rupee currency is issued in units of five, ten, twenty, fifty, one hundred, two hundred, and five hundred rupees. The reverse side has denominations in fifteen languages, while the front side has denominations in English and Hindi.
The Reserve Bank of India (RBI) regularly updates the designs on banknotes. These changes may include old images like the Mahatma Gandhi series with new ones of the same name, celebrating various themes from India’s rich heritage.
Indian currency: Coins
In India, coins are issued in the following denominations: 10, 20, 25, and 50 paise; and 1, 2, and 5 rupees. A paise coin equals 1/100th of a rupee. Coins valued at 50 paise or less are known as small coins and are less in circulation; coins valued at more than one rupee are called rupee coins.
The coins are produced at the India Government Mint’s four facilities. Since independence, the 1, 2, and 5 coins have been produced. The Government of India has launched Rs 20 coin with a dodecagonal form and bi-metallic finish, similar to the Rs 10 coin, as well as new designs for the new versions of the Rs 1, 2, 5 and 10 coins.
The Indian rupee: Counterfeiting issues
As India’s economy is largely cash-based, the country has experienced problems with counterfeit currency in circulation. The (RBI) has had to change and update rupee notes multiple times with new security features.
The Indian currency has long been subject to various restrictions on movement. For instance, it is illegal for foreign nationals to either import or export currency. Only small amounts of Indian currency can be imported and exported by Indian nationals.
The Indian rupee: Factors affecting the value
- The global performance of the US dollar
- Capital market outflows
- Crude oil prices
- India’s retail inflation rate (CPI)
- Importers and banks have a seasonal demand for dollars.
Indian rupee: Future predictions
- The INR’s economic prospects are currently positive.
- According to BofA Securities India, India might become the world’s third-largest economy by 2028. It’s now the third-largest by purchasing power parity.
- The INR is expected to become a stronger currency, free of the problems that it presently faces, thanks to the government’s better foreign exchange reserves, increased FDI into the economy, and low real borrowing costs.