The Indian rupee is the official currency of the Republic of India. The use of a currency called rupee in India can be traced back to the 1400s with the only exceptions being during times when India was colonized by other nations. The Indian rupee is also widely accepted but unofficial in Zimbabwe and Bhutan. One Indian rupee is divided into 100 paise (paisa in singular) but since 2010 only the 50 paise coin exists and it is very rarely used.
Abbreviations of the Indian Rupee
Due to the Indian rupee’s very short and two-syllable name, it lacks any real nicknames or abbreviations. However, in the year 2010, an official sign was adopted to represent the currency. The rupee sign looks like this: ₹. It is created as a combination of the Indian consonant Ra which is the first letter of the word rupee, and the Latin capital letter R. It also has elements representing the Indian flag and an equality sign representing India’s struggle to reach economic equality.
The sign was officially accepted in 2010 but didn’t come into use until the year after.
Just like all other currencies in the world, the Indian rupee also has an official ISO-4217 code: INR.
The Indian Rupee’s Denominations
In 2016 the Indian rupee experienced an emergency demonetization that you can read more about below under the section titled “The Indian Rupee Today.”
The Indian rupee currently exists in 15 different denominations, 10 banknotes, and 5 coins. However, the currency is also going through some major updates and this number could change on any given day. At the time of writing these following denominations were in use in India.
- 50 paise – extremely unusual and will probably be taken out of circulation soon.
- 1 ₹
- 2 ₹
- 5 ₹
- 10 ₹
- 1 ₹ – rarely used
- 2 ₹ – rarely used
- 5 ₹ – rarely used
- 10 ₹
- 20 ₹
- 50 ₹
- 100 ₹
- 200 ₹
- 500 ₹
- 2.000 ₹
All the Indian coins, except for the 10 ₹, exist in four different versions with different designs and even sizes. The 10 ₹ coin only exists in two different versions. A system with this many different coins is notoriously confusing. But there are currently no indications that the Indian government is planning to change it. The confusion is made worse by the fact that all the coin values also exist as banknotes.
The Indian banknotes either belong to the Mahatma Gandhi Series that was first released in 1996 but has since been updated or the New Mahatma Gandhi Series that was released in 2016.
All the bills have Mahatma Gandhi on the obverse side with the value in Roman numbers and Sanskrit. On the reverse side, classical Indian pictures are depicted such as an elephant, rhino and tiger on the 10 ₹ bill, the Himalayan mountains on the 100 ₹ bill, and the Red Fort on the 500 ₹ bill.
History of the Indian Rupee
Some historians claim to have traced the use of rupees back to the 1400s while others are certain that the currency wasn’t introduced until the 1500s by Sultan Sher Shah Suri. However, India is considered to be one of the first countries in the world to have used a currency a few hundred years B.C.
Due to the many nations that have colonized India, there have been several currencies co-existing with the Indian rupee at times and even replacing it for short periods of time. For example, the Danish Indian rupee, the French Indian rupee, and the Portuguese Indian rupee have all been used in the country during the 19th and 20th century.
The British empire has also tried to introduce and sabotage a few currencies in the country without ever really succeeding. The British empire instead opted to keep the Indian rupee but took control over it.
The Indian rupee was also used in the Gulf States Aden, Oman, Dubai, Kuwait, Bahrain, and Qatar while they were under British rule. That system was replaced with a currency called the Gulf rupee that was issued and controlled by the Indian central bank. The Gulf rupee has since been replaced in all those nations.
At times, the Indian rupee was also used in former British colonies in Africa such as Kenya and Uganda, and it still remains an unofficial method of payment in Zimbabwe.
The Indian Rupee Today
Today the Indian rupee is issued, printed, and regulated by India’s central bank, The Reserve Bank of India. It is technically a floating currency with a value based on the market. However, the Indian central bank continuously trades the Indian rupee with the American dollar to keep the exchange rate stable.
At 8 pm on November 8th, 2016 the Indian Prime Minister Narendra Modi, announced that the 500 ₹ and 1,000 ₹ bills would be taken out of circulation and replaced with a new 500 ₹ bill and a 2,000 ₹ bill.
The change was immediate and the Indian people were given 3 days to change their bills (500₹ and 100₹ were at the time the most used bills in the country) and it created nationwide chaos. The Reserve Bank of Indian hadn’t printed enough new bills and the country experienced an extreme shortage of cash just 24 hours after the announcement.
The shortage of new bills resulted in people having to stand in long lines outside of banks for several days which directly lead to the death of at least 150 people.
The Indian government claimed that this was done to stop the illegal trade of money in Pakistan and to hurt the black market in India, but the decision has been ridiculed across the globe. In fact, it has been proven that the 2016 Indian Banknote Monetization had devastating effects on the country’s GDP and production that still remains today.
Trade the Indian Rupee
In 2016 the Indian rupee was the 18th most traded currency in the world representing 1.1% of the daily market share. It is popular to trade the Indian rupee with Middle Eastern currencies, as well as with the neighboring countries of Pakistan (PKR), Nepal (NPR), and Bangladesh (BDT).