In this article, We learn about "Indian Rupee (INR)".Let's Go!
The Indian Rupee (INR) is the official currency of India, a large and diverse country located in South Asia.
The word rupee is derived from "rupiah" which means silver coin in Sanskrit.
Rupee is one of the oldest currencies on earth. Its origins date back to the 6th century BC, although its current name was adopted in the 16th century.
The Reserve Bank of India (RBI) is responsible for issuing and managing the Indian rupee.
Exchange rate system
The Indian Rupee operates on a managed floating exchange rate system, with its value relative to other currencies determined by market forces such as supply and demand.
The Reserve Bank of India may intervene in the foreign exchange market if necessary to maintain stability or prevent excessive volatility.
This system enables the Indian Rupee to respond to external shocks and changes in global market conditions while maintaining a certain degree of stability.
Segments and denominations
The
Indian Rupee is subdivided into 100 smaller units called Paiz.
The coins are available in denominations of 1, 2, 5 and 10 rupees and 50 paise.
Notes are available in denominations of Rs 5, 10, 20, 50, 100, 200, 500 and 2,000 rupees.
History of Rupee
Until World War I, the rupee was pegged to the British pound and maintained parity with the U.S. dollar.
The British pound was on the gold standard. When the gold-silver ratio expanded, the colonial government's expenditures to repay British debt required more and more rupee remittances, leading to increased taxes and the danger of rising social unrest.
In 1960, after India ran a trade deficit for some time, the Reserve Bank of India devalued the rupee. Since then, the value of the rupee has continued to fall.
In 1969, 1 rupee was worth 13 pence. In 1979 it was 6 pence and in 1989 it was 3 pence to the rupee.
In 1991, with the rupee still pegged to a basket of currencies from its major trading partners, an economic crisis brought the country to the brink of default.
In 1996, India suffered from high inflation and budget deficits, forcing the government to devalue the rupee again.
In the first decade of the 21st century, the rupee experienced a period of stability, with an exchange rate ranging between 44 and 48 rupees to the dollar.
Then the financial crisis hit, and foreign investors withdrew large amounts of cash from emerging markets.
The Indian government was forced to impose currency controls to prevent further depreciation of the rupee.
Economy and Challenges
India has a diversified economy characterized by a mix of agriculture, manufacturing and services.
Agriculture, especially the production of cereals, fruits and livestock, is an important sector that provides employment to a large proportion of the population.
Manufacturing, including textiles, chemicals and engineering products, is also an important part of the economy.
The service industry, especially information technology (IT) services and outsourcing, has grown rapidly in recent years and has made great contributions to India's economic development and global competitiveness.
However, India faces various economic challenges, including high levels of poverty and inequality, a large informal sector, inadequate infrastructure, and slow progress in economic reforms.
The Indian government has been committed to formulating policies to promote economic growth, attract foreign investment, improve infrastructure, and solve social problems such as income inequality and unemployment.
Summary
In summary, the Indian Rupee is the official currency of India and is administered by the Reserve Bank of India. Its ISO code is INR and its symbol is (£).
The currency operates on a managed floating exchange rate system, with its value determined by market forces and potential central bank intervention.
The Indian Rupee is subdivided into paise and issued in various notes and coins.
India’s economy is diversified, dominated by agriculture, manufacturing and services, but the country faces challenges such as poverty, inequality, inadequate infrastructure and slow progress in economic reforms.
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