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Introduction to Indian Rupee Currency
The Indian rupee (symbol: ₹; code: INR) is the official currency of India. The rupee is subdivided into 100 paise (singular: paisa), though as of 2019, coins of the denomination of 1 rupee are the lowest value in use.
Introduction to Indian Rupee Currency
The rupee is the name of the currency used in India, Pakistan, Sri Lanka, Indonesia, Nepal and Mauritius.
Indian Prime Minister Narendra Modi said on the 8th that in order to combat corruption and money laundering, the denominations of 500 rupees (about 7.5 US dollars) and 1,000 rupees (about 15 US dollars) will be changed from November 2016. Circulation ceased at 0:00 on the 9th.
Rupee History
The word “rupee” means “silver coin“. In the 19th century, the strongest economic system in the world at that time used gold as the standard. As American and European colonists discovered a lot of silver, the relative value of silver and gold also fell, and India could not purchase from the outside world in standard currency. This incident Call it the “decline of the rupee”.
The Indian rupee is the legal currency of India, usually using Rs as an abbreviation, and the ISO 4217 code is INR. Locally, the rupee has many aliases in different regions, such as Taka, Tanka, Rubai, Rupaye, etc. Token name: Paisa
The Reserve Bank of India (RBI) announced on March 21, 2006, that it established a special committee headed by former Deputy Governor Tarapur to formulate a framework timetable for making the Indian rupee fully convertible. The committee officially started operations on May 1 and submitted a feasibility report by July 31 to prompt the rupee to be finally fully “unbanned.”
The Deputy Governor of the Central Bank of Nepal Chintamani said on the 17th that China’s first paper money printed for Nepal is of higher quality, brighter in color and cheaper.
Parity
Because of the economic and trade pressure from Western countries led by the United States, people’s eyes are always on the parity of the RMB against the U.S. dollar. In fact, the currencies of India and China, namely the rupee and the renminbi, are undergoing a quiet contest.
In the first nine months of 2007, the rupee appreciated by 12.8% against the dollar, 12.3% against the yen, and 4.8% against the strong euro; at the same time, a large amount of foreign hot money poured into India, and foreign capital has invested 16.5 billion U.S. dollars have more than doubled the $8 billion that poured into Indian stocks in 2006. In 2006, India’s economic growth rate was 9.4%, the highest in 18 years.
By contrast, China’s economic growth rate was 11% in 2006, four years of double-digit growth, and continued unabated in 2007. The problem is that while China’s economic growth rate far outpaced India’s, in the first nine months of 2007, the renminbi only appreciated by 3.7% against the dollar, while maintaining a cumulative depreciation against the euro. Obviously, as rising powers, India is following a development path with a high currency value, while China is following a development path with a low currency value.
This high-currency strategy has already caused controversy within India. Some critics point out that it is dangerous for India to deviate from China’s development model. Low currency value encourages exports, which can attract a large number of foreign capital to establish export industrial bases in India so that more people (especially poor people) can benefit from economic development. The fact that China’s manufacturing industry is ahead of India’s and its economic growth is higher than that of India is closely related to the strategy of low currency value.
But supporters of a high currency say the rising rupee has helped India curb inflation and protect consumers amid rapid growth. At the same time, the high currency value forces Indian companies to improve their quality in the international competition, which will be more competitive in the long run.
For example, India’s high-tech company Infosys has recently gained 18% in profit, but the stock value has not risen but fallen, because the rupee has appreciated too much and investors are worried. This reflects that Indian companies are facing a rather high bar and must find ways to reduce costs and improve the technical content and added value of their products in order to compete internationally.
It is difficult to generalize whether the development strategies of high currency value and low currency value are better or worse. However, the performance of the rupee shows that although India cannot catch up with China in terms of development speed, its economy has jumped over a horizontal bar that China’s economy has not yet jumped.
As we all know, the appreciation of the renminbi has always been a threat to China’s manufacturing industry. Some Indian media even claimed that if the renminbi appreciates by a few more percentage points, many Chinese companies will go bankrupt. China’s strong exports are guaranteed by a low currency value. India, on the other hand, can revalue the rupee by around 12% in nine months without losing economic momentum. Can China do this?
Now China is surpassing Japan to become the second largest economy in the world. In the next few years, China’s economic growth rate may be ahead of India’s. However, India’s economic growth may be less quantitative than China’s, but qualitatively better than China’s. For example, 70% of India’s exports to the United States are technology exports, which is still difficult for China to match. India has emerged a series of world-class companies that can compete with companies in developed countries without relying on low currency values.
China still relies on cheap labor, and the supply of this labor will continue to decrease in the next decade or so. From the perspective of the international environment, India’s high currency value maintains a good trade balance, preventing it from becoming the target of trade protectionism, and facing relatively few trade barriers in the future. Therefore, the high currency value of the Indian rupee is worthy of China’s observation and consideration.
