History of the rupee
Encyclopedia
Pakistan
Pakistan , officially the Islamic Republic of Pakistan is a sovereign state in South Asia. It has a coastline along the Arabian Sea and the Gulf of Oman in the south and is bordered by Afghanistan and Iran in the west, India in the east and China in the far northeast. In the north, Tajikistan...
and north-western India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
, was one of the earliest issuers of coins in the world (circa 6th century BC), along with the Chinese wen
Chinese wen
The cash was a currency denomination used in China between 621 and 1948. It was the chief denomination until the introduction of the yuan in the late 19th century.-Etymology:...
and Lydian stater
Stater
The stater was an ancient coin used in various regions of Greece.-History:The stater is mostly of Macedonian origin. Celtic tribes brought it in to Europe after using it as mercenaries in north Greece. It circulated from the 8th century BC to 50 AD...
s.
The origin of the word "rupee" is found in the Sanskrit
Sanskrit
Sanskrit , is a historical Indo-Aryan language and the primary liturgical language of Hinduism, Jainism and Buddhism.Buddhism: besides Pali, see Buddhist Hybrid Sanskrit Today, it is listed as one of the 22 scheduled languages of India and is an official language of the state of Uttarakhand...
rūpya
Rupa
In Hinduism and Buddhism, rūpa generally refers to material objects, particularly in regards to their appearance.-Definition:According to the Monier-Williams Dictionary , rūpa is defined as:...
"shaped; stamped, impressed; coin".
The derivative word rūpaya was used to denote the coin introduced by Sher Shah Suri
Sher Shah Suri
Sher Shah Suri , birth name Farid Khan, also known as Sher Khan , was the founder of the short-lived Sur Empire in northern India, with its capital at Delhi, before its demise in the hands of the resurgent Mughal Empire...
during his reign of 1540 to 1545. The original rūpaya was a silver coin weighing 175 grains
Grain (measure)
A grain is a unit of measurement of mass that is nominally based upon the mass of a single seed of a cereal. From the Bronze Age into the Renaissance the average masses of wheat and barley grains were part of the legal definition of units of mass. However, there is no evidence of any country ever...
troy (about 11.34 grams).
The silver coin remained in use during the Mughal period as well as in British India.
Among the earliest issues of paper rupees
Banknote
A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...
were those by the Bank of Hindustan (1770–1832), the General Bank of Bengal and Bihar (1773–75, established by Warren Hastings
Warren Hastings
Warren Hastings PC was the first Governor-General of India, from 1773 to 1785. He was famously accused of corruption in an impeachment in 1787, but was acquitted in 1795. He was made a Privy Councillor in 1814.-Early life:...
), the Bengal Bank (1784–91), amongst others.
Formerly the rupee was divided into 16 annas
Indian anna
An Anna was a currency unit formerly used in India, equal to 1/16 rupee. It was subdivided into 4 Paise or 12 Pies . The term belonged to the Muslim monetary system...
, 64 paise, or 192 pies. In Arabia and East Africa the British India rupee was current at various times, including the paisa and was used as far south as Natal
Colony of Natal
The Colony of Natal was a British colony in south-eastern Africa. It was proclaimed a British colony on May 4, 1843 after the British government had annexed the Boer Republic of Natalia, and on 31 May 1910 combined with three other colonies to form the Union of South Africa, as one of its...
.
In Mozambique
Mozambique
Mozambique, officially the Republic of Mozambique , is a country in southeastern Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west and Swaziland and South Africa to the southwest...
the British India rupees were overstamped, and in Kenya
Kenya
Kenya , officially known as the Republic of Kenya, is a country in East Africa that lies on the equator, with the Indian Ocean to its south-east...
the British East Africa company minted the rupee and its fractions as well as pice. It was maintained as the florin, using the same standard, until 1920. In Somalia
Somalia
Somalia , officially the Somali Republic and formerly known as the Somali Democratic Republic under Socialist rule, is a country located in the Horn of Africa. Since the outbreak of the Somali Civil War in 1991 there has been no central government control over most of the country's territory...
the Italian colonial authority minted 'Rupia' to exactly the same standard, and called the paisa 'besa'. Early 19th century E.I.C. rupees were used in Australia for a limited period. Decimalisation
Decimalisation
Decimal currency is the term used to describe any currency that is based on one basic unit of currency and a sub-unit which is a power of 10, most commonly 100....
occurred in Ceylon (Sri Lanka
Sri Lanka
Sri Lanka, officially the Democratic Socialist Republic of Sri Lanka is a country off the southern coast of the Indian subcontinent. Known until 1972 as Ceylon , Sri Lanka is an island surrounded by the Indian Ocean, the Gulf of Mannar and the Palk Strait, and lies in the vicinity of India and the...
) in 1872, India in 1957 and in Pakistan
Pakistan
Pakistan , officially the Islamic Republic of Pakistan is a sovereign state in South Asia. It has a coastline along the Arabian Sea and the Gulf of Oman in the south and is bordered by Afghanistan and Iran in the west, India in the east and China in the far northeast. In the north, Tajikistan...
in 1961.
Historically, the rupee was a silver based currency. This had severe consequences in the 19th century, when the strongest economies in the world were on the gold standard
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold. There are distinct kinds of 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."
During British rule, and the first decade of independence, the rupee was subdivided into 16 annas
Indian anna
An Anna was a currency unit formerly used in India, equal to 1/16 rupee. It was subdivided into 4 Paise or 12 Pies . The term belonged to the Muslim monetary system...
. Each anna was subdivided into either 4 pices, or 12 pies.
In 1957, decimalisation
Decimalisation
Decimal currency is the term used to describe any currency that is based on one basic unit of currency and a sub-unit which is a power of 10, most commonly 100....
occurred and the rupee was now divided into 100 Naye Paise (Hindi for new paisas). After a few years, the initial "Naye" was dropped. However many still refer to 25, 50 and 75 paise as 4, 8 and 12 annas respectively, not unlike the now largely defunct usage of "bit
Bit (money)
The word bit is a colloquial expression referring to specific coins in various coinages throughout the world.-United Kingdom and Commonwealth countries:...
" in American English for 1/8 dollar. However the usage is in decline.
Early paper issues
Notes issued by the Bank of Bengal can be categorised in the following three series.- Unifaced series: The early notes of the Bank of Bengal were printed only on one side and were issued as one gold mohur and in denominations of Rs. 100, Rs. 250, Rs. 500, etc.
- Commerce series: Later notes had a vignette representing an allegorical female figure personifying 'commerce'. The notes were printed on both sides. On the obverse the name of the bank and the denominations were printed in three scripts, viz., {UrduUrduUrdu is a register of the Hindustani language that is identified with Muslims in South Asia. It belongs to the Indo-European family. Urdu is the national language and lingua franca of Pakistan. It is also widely spoken in some regions of India, where it is one of the 22 scheduled languages and an...
, BengaliBengali languageBengali or Bangla is an eastern Indo-Aryan language. It is native to the region of eastern South Asia known as Bengal, which comprises present day Bangladesh, the Indian state of West Bengal, and parts of the Indian states of Tripura and Assam. It is written with the Bengali script...
and DevanagariDevanagariDevanagari |deva]]" and "nāgarī" ), also called Nagari , is an abugida alphabet of India and Nepal...
}. On the reverse of such notes was printed a cartouche with ornamentation carrying the name of the Bank. - Brittania series: By late 19th century, the motif 'commerce' was replaced by 'Britannia'. The new banknotes had more features to prevent forgery.
British India issues
The Paper Currency Act of 1861 gave the Government the monopoly of note issue throughout the vast expanse of India, which was a considerable task. Eventually, the management of paper currency was entrusted to the Mint Masters, the Accountant Generals and the Controller of Currency.- Victoria portrait series: The first set of British India notes were the 'VictoriaVictoria of the United KingdomVictoria was the monarch of the United Kingdom of Great Britain and Ireland from 20 June 1837 until her death. From 1 May 1876, she used the additional title of Empress of India....
Portrait' series issued in denominations of 10, 20, 50, 100 and 1000. These were unifaced, carried two language panels. The security features incorporated the watermark, the printed signature and the registration of the notes. - Underprint series: The unifaced Underprint series was introduced in 1867 as the Victoria Portrait series was withdrawn in the wake of a spate of forgeries. These notes were issued in denominations of Rs 5, 10, 20, 50, 100, 500, 1000 and 10000.
- George V series: A series carrying the portrait of George VGeorge V of the United KingdomGeorge V was King of the United Kingdom and the British Dominions, and Emperor of India, from 6 May 1910 through the First World War until his death in 1936....
were introduced in 1923, and was continued as an integral feature of all paper money issues of British India. These notes were issued in denominations of Rs 1, 2½, 5, 10, 50, 100, 1000, 10,000.
Reserve Bank issues during British India
The Reserve Bank of India was formally inaugurated on Monday, April 1, 1935 with its Central Office at Calcutta. Section 22 of the RBI Act, 1934, empowered it to continue issuing Government of India notes until its own notes were ready for issue. The bank issued the first five rupee note bearing the portrait of George VIGeorge VI of the United Kingdom
George VI was King of the United Kingdom and the Dominions of the British Commonwealth from 11 December 1936 until his death...
in 1938. This was followed by Rs. 10 in February, Rs 100 in March and Rs 1,000 and Rs 10,000 in June 1938. The first Reserve Bank issues were signed by the second Governor, Sir James Taylor. In August 1940, the one-rupee note was reintroduced as a wartime measure, as a Government note with the status of a rupee coin. During the war, the Japanese produced high-quality forgeries of the Indian currency. This necessitated a change in the watermark. The profile portrait of George VI was changed to his full frontal portrait. The security thread was introduced for the first time in India. The George VI series continued till 1947 and thereafter as a frozen series till 1950 when post-independence notes were issued.
Republic of India issues
After Independence of India, the government brought out the new design Re. 1 note in 1949. Initially it was felt that the King's portrait be replaced by a portrait of Mahatma GandhiMahatma Gandhi
Mohandas Karamchand Gandhi , pronounced . 2 October 1869 – 30 January 1948) was the pre-eminent political and ideological leader of India during the Indian independence movement...
. Finally however, the Lion Capital of Asoka
Lion Capital of Asoka
The Lion capital of Ashoka is a sculpture of four "Indian lions" standing back to back. It was originally placed atop the Aśoka pillar at Sarnath, now in the state of Uttar Pradesh, India by Emperor Ashoka circa 250 BC. The pillar, sometimes called the Aśoka Column is still in its original...
was chosen. The new design of notes were largely along earlier lines. In 1953, Hindi
Hindi
Standard Hindi, or more precisely Modern Standard Hindi, also known as Manak Hindi , High Hindi, Nagari Hindi, and Literary Hindi, is a standardized and sanskritized register of the Hindustani language derived from the Khariboli dialect of Delhi...
was displayed prominently on the new notes. The economic crisis in late 1960s led to a reduction in the size of notes in 1967. High denomination notes, like Rs. 10,000 notes were demonetised in 1978.
The "Mahatma Gandhi Series" was introduced in 1996. Prominent new features included a changed watermark, windowed security thread, latent image and intaglio features for the visually handicapped.
Rupee coinage since the British period
The British settlements in Western India, South IndiaSouth India
South India is the area encompassing India's states of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu as well as the union territories of Lakshadweep and Pondicherry, occupying 19.31% of India's area...
, and the Eastern Province of Bengal
Bengal
Bengal is a historical and geographical region in the northeast region of the Indian Subcontinent at the apex of the Bay of Bengal. Today, it is mainly divided between the sovereign land of People's Republic of Bangladesh and the Indian state of West Bengal, although some regions of the previous...
(Calcutta) independently developed different coinages in consonance with the local acceptability of the coins for the purposes of trade.
Mughal era
The Mughal era is a historic period of the Mughal Empire in South Asia . It ran from the early 15th century to a point in the early 18th century when the Mughal Emperors' power had dwindled...
style and those of Madras mostly in a South Indian style. The English coins of Western India developed along Mughal as well as English patterns. It was only in 1717 AD that the English obtained permission from the Emperor Farrukh Siyar to coin Mughal money at the Bombay mint. The British gold coins were termed Carolina, the silver coins Anglina, the copper coins Cupperoon and tin coins Tinny. By the early 1830, the English had become the dominant power in India. The Coinage Act of 1835 provided for uniform coinage throughout India. The new coins had the effigy of William IV
William IV of the United Kingdom
William IV was King of the United Kingdom of Great Britain and Ireland and of Hanover from 26 June 1830 until his death...
on the obverse and the value on the reverse in English and Persian
Persian language
Persian is an Iranian language within the Indo-Iranian branch of the Indo-European languages. It is primarily spoken in Iran, Afghanistan, Tajikistan and countries which historically came under Persian influence...
. The coins issued after 1840 bore the portrait of Queen Victoria
Victoria of the United Kingdom
Victoria was the monarch of the United Kingdom of Great Britain and Ireland from 20 June 1837 until her death. From 1 May 1876, she used the additional title of Empress of India....
. The first coinage under the crown was issued in 1862 and in 1877 Queen Victoria assumed the title the Empress of India.
The 1911 accession to the throne of the King-Emperor George V
George V of the United Kingdom
George V was King of the United Kingdom and the British Dominions, and Emperor of India, from 6 May 1910 through the First World War until his death in 1936....
led to the famous "pig rupee". On the coin the King appeared wearing the chain of the Order of the Indian Elephant. Through poor engraving the elephant looked very much like a pig. The Muslim
Muslim
A Muslim, also spelled Moslem, is an adherent of Islam, a monotheistic, Abrahamic religion based on the Quran, which Muslims consider the verbatim word of God as revealed to prophet Muhammad. "Muslim" is the Arabic term for "submitter" .Muslims believe that God is one and incomparable...
population was enraged and the image had to be quickly redesigned.
Acute shortage of silver during the First World War, led to the introduction of paper currency of One Rupee and Two and a half Rupees. The silver coins of smaller denominations were issued in cupro-nickel. The compulsion of the Second World War led to experiments in coinage where the standard rupee was replaced by the "Quaternary Silver Alloy". The Quaternary Silver coins were issued from 1940. In 1947 these were replaced by pure Nickel coins.
Immediately after independence, the British coinage was continued. The Monetary System remained unchanged at One Rupee consisting of 64 pice, or 192 pies.
The "Anna Series" was introduced on 15 August 1950. this was the first coinage of Republic of India. The King's Portrait was replaced by the Asoka's Lion Capital. A corn sheaf replaced the Tiger on the one Rupee coin. The monetary system was retained with one Rupee consisting of 16 Annas. The 1955 Indian Coinage (Amendment) Act, that came into force with effect from 1 April 1957, introduced a "Decimal series". The rupee was now divided into 100 'Paisa' instead of 16 Annas or 64 Pice.
With high inflation in the sixties, small denomination coins which were made of bronze, nickel-brass, cupro-nickel, and Aluminium
Aluminium
Aluminium or aluminum is a silvery white member of the boron group of chemical elements. It has the symbol Al, and its atomic number is 13. It is not soluble in water under normal circumstances....
-Bronze
Bronze
Bronze is a metal alloy consisting primarily of copper, usually with tin as the main additive. It is hard and brittle, and it was particularly significant in antiquity, so much so that the Bronze Age was named after the metal...
were gradually minted in Aluminium. This change commenced with the introduction of the new hexagonal 3 paise coin. A twenty paise coin was introduced in 1968 but did not gain much popularity.
Over a period of time, cost benefit considerations led to the gradual discontinuance of 1, 2 and 3 paise coins in the seventies; Stainless steel coinage of 10, 25 and 50 paise, was introduced in 1988 and of one rupee in 1992. The very considerable costs of managing note issues of Re 1, Rs 2, and Rs 5 led to the gradual coinisation of these denominations in the 1990s.
Other issues
- Pakistani issues: After independence, Pakistan adopted the Pakistani Rupee to fund the nation. Today, the notes feature the father of the nation, Jinnah.
- Jammu and Kashmir issues: Maharaja Rambir Singh introduced paper money on watermarked paper in 1877. The notes were not very popular and were in circulation for a very short period. The notes carried the 'Sun' motif of the DograDograThe Dogras are an Indo-Aryan ethnic group in South Asia. Being a diversified group, the Dogras include both Savarnas such as Brahmins, Rajputs and Non-savarnas. The Dogras also incluide merchant castes such as Mahajans...
family. - Hyderabad issues: The Government of HyderabadHyderabad State-After Indian independence :When India gained independence in 1947 and Pakistan came into existence in 1947, the British left the local rulers of the princely states the choice of whether to join one of the new dominions or to remain independent...
had made several efforts to organise private bankers to set up a banking company which could issue paper money. The British, however resisted the attempts of Indian princely statePrincely stateA Princely State was a nominally sovereign entitity of British rule in India that was not directly governed by the British, but rather by an Indian ruler under a form of indirect rule such as suzerainty or paramountcy.-British relationship with the Princely States:India under the British Raj ...
s to issue paper currency. The acute shortage of silver during the First World War and the contributions of Hyderabad StateHyderabad State-After Indian independence :When India gained independence in 1947 and Pakistan came into existence in 1947, the British left the local rulers of the princely states the choice of whether to join one of the new dominions or to remain independent...
to the British war effort led them to accept, in 1918, paper currency in denominations of Rs.10/- and Rs.100/- issued under the Hyderabad Currency Act. The currency was designated the Osmania Sicca (OS). Rupee One and Rupees Five notes were issued subsequently in 1919 and Rupees One Thousand notes were issued in 1926. After the setting up of the India Currency Notes Press at Nasik, Hyderabad notes came to be printed there. - Burma issues: Burma separated from India in 1938; however, the Reserve Bank of India acted as Banker to the Government of Burma and was responsible for note issue in terms of the Burma Monetary Arrangements Order, 1937. In May 1938 the Bank issued Burma notes which were not legal tender in India.
- Indo-French issues: The French Indian rupee (FIR) was introduced by France's Bank of IndochinaIndochinaThe Indochinese peninsula, is a region in Southeast Asia. It lies roughly southwest of China, and east of India. The name has its origins in the French, Indochine, as a combination of the names of "China" and "India", and was adopted when French colonizers in Vietnam began expanding their territory...
in French coloniesFrench IndiaFrench India is a general name for the former French possessions in India These included Pondichéry , Karikal and Yanaon on the Coromandel Coast, Mahé on the Malabar Coast, and Chandannagar in Bengal...
of IndiaIndiaIndia , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
. - Indo-Portuguese issues : The Portuguese Indian Rupia was the currency of Portuguese IndiaPortuguese IndiaThe Portuguese Viceroyalty of India , later the Portuguese State of India , was the aggregate of Portugal's colonial holdings in India.The government started in 1505, six years after the discovery of a sea route to India by Vasco da Gama, with the nomination of the first Viceroy Francisco de...
until 1959. It was divisible into 16 Tangas or 960 ReisReis-Surname:Reis is a common surname in the Portuguese language, namely in Portugal and Brazil. It was originally a Christian devotional family name of the Middle Ages, probably due to the Portuguese name for the Biblical Magi, the Reis Magos . Sometimes the surname is dos Reis...
. In 1959, the currency was changed to the Portuguese Indian EscudoPortuguese Indian escudoThe escudo was the currency of Portuguese India between 1958 and 1961. It was divisible into 100 centavos and was equal in value to the Portuguese escudo.-History:The escudo replaced the rúpia at the rate of 1 rúpia = 6 escudos...
, at the rate of 1 Rupia for 6 Escudos. - Persian Gulf issues: For many years in the early and mid-20th century, the Indian rupee was the official currency in several areas that were controlled by the British and governed from India; areas such as East Africa, Southern Arabia and the Persian GulfPersian GulfThe Persian Gulf, in Southwest Asia, is an extension of the Indian Ocean located between Iran and the Arabian Peninsula.The Persian Gulf was the focus of the 1980–1988 Iran-Iraq War, in which each side attacked the other's oil tankers...
. The rupees used in the Persian Gulf had been bought by the Gulf states from the Reserve Bank of IndiaReserve Bank of IndiaThe Reserve Bank of India is the central banking institution of India and controls the monetary policy of the rupee as well as US$300.21 billion of currency reserves. The institution was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of...
, who held the sterling reserves by which the rupees had originally been purchased. However, Indian rupees were being smuggled from India to the states of the Persian Gulf in exchange for gold. It was estimated in 1959 that the total amount of gold in private hands in India was about $US1.75 to 2 billion—roughly two thirds of the value of paper money in circulation. While it was legal to own and to trade in gold within India, it was illegal to import or export gold. The Gulf Rupee, also known as the Persian Gulf Rupee (XPGR), was introduced by the IndiaIndiaIndia , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
n government as a replacement for the Indian RupeeIndian rupeeThe Indian rupee is the official currency of the Republic of India. The issuance of the currency is controlled by the Reserve Bank of India....
for circulation exclusively outside the country with the Reserve Bank of India Amendment Act, 1 May 1959. After India devalued the rupee on 6 June 1966, those countries still using it - OmanOmanOman , officially called the Sultanate of Oman , is an Arab state in southwest Asia on the southeast coast of the Arabian Peninsula. It is bordered by the United Arab Emirates to the northwest, Saudi Arabia to the west, and Yemen to the southwest. The coast is formed by the Arabian Sea on the...
, QatarQatarQatar , also known as the State of Qatar or locally Dawlat Qaṭar, is a sovereign Arab state, located in the Middle East, occupying the small Qatar Peninsula on the northeasterly coast of the much larger Arabian Peninsula. Its sole land border is with Saudi Arabia to the south, with the rest of its...
and what is now the United Arab EmiratesUnited Arab EmiratesThe United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...
(known as the Trucial States until 1971) - replaced the Gulf Rupee with their own currencies. KuwaitKuwaitThe State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...
and BahrainBahrain' , officially the Kingdom of Bahrain , is a small island state near the western shores of the Persian Gulf. It is ruled by the Al Khalifa royal family. The population in 2010 stood at 1,214,705, including 235,108 non-nationals. Formerly an emirate, Bahrain was declared a kingdom in 2002.Bahrain is...
had already done so in 1961 and 1965 respectively. - Emergency issues, Princely states: During the 1940s, when mints were occupied for use in the war, an acute scarcity of small coins was felt throughout India. Princely states in Western India like Balvan, Bikaner, BundiBundiBundi is a city and a municipality of approximately 88,000 inhabitants in the Hadoti region of Rajasthan state in northwest India. It is of particular architectural note for its ornate forts, palaces, and stepwell reservoirs known as baoris...
, Gondal, Indergadh, JunagadhJunagadhJunagadh is the headquarters of Junagadh district in the Indian state of Gujarat. The city is the 7th largest in Gujarat. The city is located at the foot of the Girnar hills, 355 km south west of state capital Gandhinagar and Ahmedabad. The city is in western India. Literally translated,...
, JasdanJasdanJasdan is a city and a municipality in Rajkot district in the Indian state of Gujarat.-Geography:Jasdan is located at . It has an average elevation of 193 metres . Ghela Somnath Temple is situated in Jasdan.Jasdan is the biggest Taluka in Rajkot district and has 102 villages.-Demographics:...
, Kutch Mengni, MuliMuliMuli may refer to:Places:*Mili Tibetan Autonomous County, or Muli from its Chinese name, of Liangshan Yi Autonomous Prefecture, Sichuan, China*Muli, Gaoqing County , town in Gaoqing County, Shandong, China...
, MorviMorviMorvi or Morbi is a city and a municipality in Rajkot district in the Indian state of Gujarat. It was a Princely State ruled by Jadeja clan of Rajputs until Indian independence in 1947. It is situated on the Kathiawar peninsula. , the city's population was determined to be 73,327. Its chief...
, MangrolMangrolMangrol is a city and a municipality in Junagadh district in the Indian state of Gujarat.-Geography:Mangrol is located at . It has an average elevation of 18 metres .-Demographics:...
, NawanagarNawanagarNavanagar was an Indian princely state, in Kathiawar region, situated on the south of the Gulf of Kutch. It was ruled by the Jadeja dynasty from its formation in c 1540 until 1948 when it succeed to newly formed, India. The district is now known as Jamnagar. It had an area of and a population...
, NawalgarhNawalgarhNawalgarh may refer to:*Nawalgarh, Rajasthan, India*Nawalgarh, Himachal Pradesh, India...
Palitana, Rajkot, SailanaSailanaSailana is a town and a nagar panchayat in Ratlam district in the Indian state of Madhya Pradesh. It is located in the Malwa region of Madhya Pradesh. Sailana is 25 km from Ratlam town and 50 km away from Banswara district of the neighboring state of Rajasthan.A Fort belonging to the former...
, SaylaSaylaSayla was a Royal province in India and is now part of the Indian State of Gujarat.Sayla was a 575 km² state ruled by the Jhala Rajputs, a clan that came to Saurashtra from Sindh and established their reign at Patdi in the 12th century. After the Islamic invasions, the Jhalas moved their...
, Vithalgadh, issued "Cash Coupons" to meet the shortage.
The fall of the Rupee
| Period | Price of silver (in pence Penny A penny is a coin or a type of currency used in several English-speaking countries. It is often the smallest denomination within a currency system.-Etymology:... per Troy ounce Troy ounce The troy ounce is a unit of imperial measure. In the present day it is most commonly used to gauge the weight of precious metals. One troy ounce is nowadays defined as exactly 0.0311034768 kg = 31.1034768 g. There are approximately 32.1507466 troy oz in 1 kg... ) |
Rupee exchange rate (in pence) |
|---|---|---|
| 1871–1872 | 60½ | 23 ⅛ |
| 1875–1876 | 56¾ | 21⅝ |
| 1879–1880 | 51¼ | 20 |
| 1883–1884 | 50½ | 19½ |
| 1887–1888 | 44⅝ | 18⅞ |
| 1890–1891 | 47 11/16 | 18⅛ |
| 1891–1892 | 45 | 16¾ |
| 1892–1893 | 39 | 15 |
| Source: B.E. Dadachanji. History of Indian Currency and Exchange, 3rd enlarged ed. (Bombay: D.B. Taraporevala Sons & Co, 1934), p. 15. |
||
After its victory in the Franco-Prussian War
Franco-Prussian War
The Franco-Prussian War or Franco-German War, often referred to in France as the 1870 War was a conflict between the Second French Empire and the Kingdom of Prussia. Prussia was aided by the North German Confederation, of which it was a member, and the South German states of Baden, Württemberg and...
(1870–71), Germany extracted a huge indemnity from France of £200,000,000, and then moved to join Britain
United Kingdom of Great Britain and Ireland
The United Kingdom of Great Britain and Ireland was the formal name of the United Kingdom during the period when what is now the Republic of Ireland formed a part of it....
on a gold standard for currency. France, the U.S. and other industrialising countries followed Germany in adopting a gold standard throughout the 1870s. At the same time, other countries, such as Japan, which did not have the necessary access to gold or those, such as India, which were subject to imperial policies that determined that they did not move to a gold standard, remained mostly on a silver standard. A huge divide between silver-based and gold-based economies resulted. The worst affected were economies with silver standard that traded mainly with economies with gold standard. With discovery of more and more silver reserves, those currencies based on gold continued to rise in value and those based on silver were declining due to demonetization of silver. For India which carried out most of its trade with gold based countries, especially Britain, the impact of this shift was profound. As the price of silver continued to fall, so too did the exchange value of the rupee, when measured against pound sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
.
The Indian rupee since 1957
Since its Independence in 1947, India has faced two major financial crises and two consequent devaluations of the rupee: In 1966 and 1991.Decimalisation
A summary of the decimalisation of the Rupee:| Dates | Currency system |
|---|---|
| From 1835 | 1 rupee = 16 annas = 64 pices (paise) = 192 pies |
| From 1 April 1957 | 1 rupee = 100 naya paise |
| From 1 June 1964 | 1 rupee = 100 paise |
The demand for decimalisation existed for over a century. Sri Lanka decimalised its rupee in 1869. The Indian Coinage Act was amended in September 1955 for the adoption of a decimal system for coinage. The Act came into force with effect from 1 April 1957. The rupee remained unchanged in value and nomenclature. It, however, was now divided into 100 'Paisa
Paisa
The paisa is a monetary unit in several countries. Linguistic variants of paisa include poisha and baisa . In India, Nepal and Pakistan, the paisa currently equals of a rupee. In Bangladesh, the poisha equals of a Bangladeshi taka...
' instead of 16 Annas
Indian anna
An Anna was a currency unit formerly used in India, equal to 1/16 rupee. It was subdivided into 4 Paise or 12 Pies . The term belonged to the Muslim monetary system...
or 64 Pice. For public recognition, the new decimal Paisa was termed 'Naya Paisa' until 1 June 1964 when the term 'Naya' was dropped. The coins of that period also mentioned their value in terms of the rupee to avoid confusion and cheating. For example, the one paisa coin carried the text "One hundredth of a Rupee" in Hindi.
1966 Economic crisis
Since 1950, India ran continued trade deficits that increased in magnitude in the 1960s. Furthermore, the Government of India had a budget deficit problem and could not borrow money from abroad or from the private corporate sector, due to that sector’s negative savings rate. As a result, the government issued bonds to the RBI, which increased the money supply, leading to inflation. In 1966, foreign aid, which was hitherto a key factor in preventing devaluation of the rupee was finally cut off and India was told it had to liberalise its restrictions on trade before foreign aid would again materialise. The response was the politically unpopular step of devaluation accompanied by liberalisation. Furthermore, The Indo-Pakistani War of 1965Indo-Pakistani War of 1965
The Indo-Pakistani War of 1965 was a culmination of skirmishes that took place between April 1965 and September 1965 between Pakistan and India. This conflict became known as the Second Kashmir War fought by India and Pakistan over the disputed region of Kashmir, the first having been fought in 1947...
led the US and other countries friendly towards Pakistan to withdraw foreign aid to India, which further necessitated devaluation. Defence spending in 1965/1966 was 24.06% of total expenditure, the highest it has been in the period from 1965 to 1989 (Foundations, pp 195). The second factor is the drought of 1965/1966. The sharp rise in prices in this period, which led to devaluation, was often blamed on the drought by government.
At the end of 1969, the Indian Rupee was trading at around 13 British Pence. A decade later, by 1979, it was trading at around 6 British Pence. Finally by the end of 1989, the Indian Rupee had plunged to an all-time low of 3 British Pence. This triggered the onset of a wave of irreversible liberalisation reforms away from populist measures.
1991 Economic crisis
In 1991, India still had a fixed exchange rate system, where the rupee was pegged to the value of a basket of currencies of major trading partners. India started having balance of payments problems since 1985, and by the end of 1990, it found itself in serious economic trouble. The government was close to default and its foreign exchange reserves had dried up to the point that India could barely finance three weeks’ worth of imports. As in 1966, India faced high inflation and large government budget deficits. This led the government to devalue the rupee.At the end of 1999, the Indian Rupee was devalued considerably.
Revaluation
In the period 2000–2007, the Rupee stopped declining and stabilized ranging between 1 USD = INR 44–48. In recent times, the Indian Rupee had begun to gain value and by 2007 traded around 39 Rs to 1 US dollar , on sustained foreign investment flows into the country. This posed problems for major exporters and BPO firms located in the country. The trend has reversed lately with the 2008 world financial crisis. The changes in the relative value of the rupee has reflected that of most currencies, e.g. the British Pound, which had gained value against the dollar and then has lost value again with the recession of 2008.Valuation history
| Year | Exchange rate (rupees per US$) |
|---|---|
| 1952 | 5.000 |
| 1970 | 7.576 |
| 1975 | 8.409 |
| 1980 | 7.887 |
| 1985 | 12.369 |
| 1990 | 17.504 |
| 1995 | 32.427 |
| 2000 | 45.000 |
| 2006 | 48.336 |
| 2007 (Oct) | 38.48 |
| 2008 (June) | 42.51 |
| 2008 (October) | 48.88 |
| 2009 (October) | 46.37 |
| 2010 (January 22) | 46.21 |
| 2011 (April) | 44.17 |
| 2011 (September 21) | 48.24 |
| 2011 (November 17) | 50.97 |
| 2011 (November 24) | 52.1150 |
2011 (November 22)
52.71* (Touched All-time low till date)
*It is not closing price
External links
- Picture of original Rupiya introduced by Sher Shah Suri
- Reserve Bank of India Monetary Museum
- World coin gallery
- Problem of the Rupee Book by B. R. Ambedkar. History of the Rupee till 1923 A.D.
- Reserve Bank of India
- Gallery of current and historical Indian banknotes