Indian Rupee - INR

What is 'Indian Rupee - INR'

The Indian rupee (INR) is the currency of India. INR is the International Organization for Standardization currency code for the Indian rupee. The rupee is made up of 100 paisa and its currency symbol is ₹. The rupee derives its name from the rupiya, a silver coin first issued by Sultan Sher Shah Suri in the 16th century.

BREAKING DOWN 'Indian Rupee - INR'

Indian Rupees are issued as coins in denominations of 50 paisa  ₹1,  ₹2,  ₹5 and ₹10. Paper rupees are issued in denominations of ₹1, ₹2, ₹5, ₹10, ₹20, ₹50, ₹100, 200 500 and ₹2,000.  ₹1 denominations are in the Lion Capital Series, while denominations of ₹5, ₹10, ₹20, ₹100 are of the Mahatma Gandhi series, and denominations ₹50,  ₹200  ₹500, and  ₹2,000 are of the New Mahatma Gandhi series. On the reverse side of paper rupees, denominations are printed in 15 languages, while denominations are printed in Hindi and English on the front side. In 2016, the Indian Government announced the demonetization of all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series, claiming it would hamstring the underground economy, making the use of illegal and counterfeit cash in funding illegal activity and terrorism much more difficult. 

In the 19th century, large increases in the quantity of silver production caused a precipitous drop in silver's value, leading to a steep decline in the rupee's value. From 1927 to 1946, the rupee was pegged to the British pound. It was then pegged to the U.S. dollar until 1975. Currently, it mostly floats on the foreign exchange market, with the Reserve Bank of India (RBI) actively trading the currency to manage its value.

Capital and Convertibility Controls

The Indian government and RBI intervene in other ways to manage the rupee's value. The rupee is subject to various capital controls and convertibility restrictions. For example, it is illegal for foreign nationals to import or export rupees, and Indian nationals may only import and export rupees in limited amounts.

The current account has no currency conversion restrictions (aside from trade barriers), an the same goes for the capital account—foreign institutional investors can bring money in and take money out of the country, converting it as they go and buy securities with it, and local firms can take capital out of the country to expand multi-nationally. The only restriction on the capital account is that households are restricted in their ability to diversify globally. However, as these accounts grow, India is moving more and more towards general convertibility. The Indian Government does not allow for the exchange of rupees for gold, due to gold's lack of liquidity.

(See also: What's the difference between the current account and the capital account?)

In 2009, the Indian government purchased $6.7 billion in gold from the IMF, which led to a further rise in the rupee.

The Rupee's Value in Modern Times

The rupee's long and steady ascent ended in 2011. Between 2011 and 2018, the currency lost almost a quarter of its value relative to the U.S. dollar. Many economists predicted that the drop in oil and commodity prices would support the rupee during 2015 because India is a major oil and commodity importer. However, the rupee continued its decline, mostly as a result of the steep decline in emerging markets economies. Investors' lack of faith in the Indian government's ability to implement market reforms was another oft-cited reason for the rupee's decline during this period.

At the 2015 World Economic Forum in Davos, Switzerland, RBI Governor Raghuram Rajan pointed to the relative strength of the rupee. Other emerging market currencies declined more relative to the U.S. dollar, while the economies and stock markets of other emerging markets experienced larger declines. The Indian rupee fell hard against the British pound and the Euro in 2013, but has recovered since, with a marked improvement against the pound 2016, and a steady recovery against the Euro since its value fell in 2013. According to, the Rupee gained 6% in 2017, though gains in 2018 look uncertain.