WCURRENCY

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Overview

The Indian Rupee (INR), symbolised by ₹, is the official currency of India — the world's most populous country and its fifth-largest economy by nominal GDP. Issued and managed by the Reserve Bank of India (RBI), the rupee has been in use in various forms for over 2,500 years, making it one of the world's oldest currencies still in circulation.

The INR operates under a managed floating exchange rate regime: the RBI does not fix the rate but intervenes regularly in foreign exchange markets to limit excessive volatility. India's large and fast-growing economy, its status as a major IT and services exporter, and its huge diaspora sending remittances home all influence the rupee's dynamics on global markets.

History

The word rupee derives from the Sanskrit rūpya, meaning "wrought silver" or "silver coin". The first rupee is credited to Sher Shah Suri, who issued a silver coin called the rupiya around 1540 during his brief reign over northern India. This coin became the foundation of the monetary system later used by the Mughal Empire and continued through the British colonial period.

Under British rule, the rupee was standardised across the subcontinent. At independence in 1947, India inherited this system. The Indian Rupee was decimalised in 1957, replacing the old system of 16 annas per rupee with 100 paise. A defining modern moment was the demonetisation of November 2016, when Prime Minister Narendra Modi abruptly withdrew all ₹500 and ₹1000 banknotes from circulation — a shock move affecting 86% of the cash in India, aimed at curbing black money and counterfeiting.

Reserve Bank of India

The Reserve Bank of India (RBI), established on 1 April 1935 under the Reserve Bank of India Act, is India's central bank and monetary authority. It is responsible for issuing currency, managing foreign exchange reserves, regulating the banking system, and setting monetary policy. The RBI's primary mandate is to maintain price stability while keeping growth in mind — a dual mandate similar to many modern central banks.

The RBI's Monetary Policy Committee (MPC) meets six times per year to set the repo rate — the rate at which the RBI lends to commercial banks — which is the key lever for controlling inflation and credit conditions. India's large informal economy, structural inflation pressures, and exposure to global commodity prices (particularly oil, which India imports heavily) make the RBI's balancing act particularly complex.

Key Facts

• The rupee symbol ₹ was officially adopted in 2010, designed by D. Udaya Kumar. It blends the Devanagari letter Ra (र) with a double horizontal bar reminiscent of the euro sign.
• India is the world's largest recipient of remittances — over $100 billion per year — a major source of foreign currency inflows supporting the INR.
• The 2016 demonetisation of ₹500 and ₹1000 notes was one of the largest and most disruptive currency reforms in modern history, affecting 1.4 billion people overnight.
• India is the world's third-largest oil importer; rising global oil prices typically weaken the INR as import costs surge.
• The INR is not fully convertible on the capital account — foreign investors face restrictions on moving large sums in and out of India freely.
• India holds over $600 billion in foreign exchange reserves, one of the largest in the world, which the RBI uses to stabilise the rupee.

See also: USD – United States Dollar · CNY – Chinese Yuan · Guide