The Indian Rupee

The Indian Rupee

The Indian Rupee is the official currency of India, which is issued by the Reserve Bank of India. The currency is available in the form of metal coins and paper banknotes, and that also in various denominations. The word Rupee is derived from the Sanskrit word ‘raupya’ which means a coin of silver. Hence earlier, the coins were also made of silver, keeping in mind the origin of the word Rupee.

THE FALL OF THE RUPEE
Historically, as the Rupee was a silver coin, the strong economies of the world were having gold coins. Subsequently, a very large amount of silver was discovered in the United Stated and many European colonies. This lead to a fall in the value of silver, as measured against gold. Hence the value of Indian Rupee also fell down tremendously over a small period of time. This event was known as “The Fall of the Rupee”.

EXCHANGE RATES FACTS

For almost a century, i.e. until the outbreak of the World War I, the Indian Rupee was in parity with the US Dollar. This means that ₹1 was equivalent to US $1. Thereafter, the Rupee declined against the Dollar, sue to trade deficits. Thereafter in 1966, US $1=₹7.5.

Today the exchange rate is somewhere around ₹1= US $63, which is quite high, as the Rupee has become very cheap, and the Dollar a bit too expensive.

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