By Ansad.

Ppansad@gmail.com

A generally accepted form of money, including coins and paper notes, which is issued by a government and circulated within an economy. Used as a medium of exchange for goods and services.

6th Century of B.C India was the one of the first issuer of coins. first

Indian coins are Punch Marked Coins (Pana).

During Mauray Empire Rupyarupa, Suvarnarupa, Tamararupa introduced

by Chandragupta Maurya in B.C 340

During the Mughal period

In the year 1540 a silver coin called Rupiya

was introduced by sher shah suri and this remind in use up to the early

period of 20th century.

Introduced Paper note In 1770’s

by Bank of Hindustan and General Bank of

Bengal and Bihar, and the Bengal Bank.

Coins of British India

The British presence in India started in 1612 and established East

India Company(EIC).

Britten categorized their Indian colonies as Madras

Presidency, Bombay Presidency, and Bengal Presidency, and each

Presidency had a separate coinage and monetary system.

In 1835, the EIC adopted a unified system of coinage throughout

India.

In 1862 the Victoria Portrait series of notes was issued and it

remained in use for approximately 50 years.

Reserve Bank of India

RBI was formally inaugurated on April 1, 1935

The bank issued the first five rupee note bearing the portrait of George VI in 1938.

The first Reserve Bank issues were signed by the second Governor, Sir James Taylor.

The value of Rupee is differentiated from the currency of other

nations.

When an Indian doing international trade he need to convert

Rupee to their currencies for make payment

For this purpose the concept of foreign exchange come into

operation.

The conversion of one country's currency into another currency.

It is the minimum number of units of one countries currency required to purchase one unit of the other countries currency.

Under the system of international payments done through FOREIGN EXCHANGE MARKET.

It is the place were foreign moneys were bought and sold.

Year

Exchange rate (INR per USD)

1948 3.31

1975 8.39

1985 12.38

1995 32.427

2005 43.47

2007 39.42

2011(Sep) 48.24

2011 (Nov) 55.39

2012 (June) 57.15

2013 (May) 54.73

2013 (Sep) 62.92

2014 (Dec) 63.30

Like any other commodity the value of Rupee is also

determined by its demand & supply. the other factors are as

follows:-

Balance of Trade

Differentials in Inflation

Interest Rate

Public Debt

Political Stability and Economic Performance

Price of Oil & gold.

It is the relationship between imports and exports of a country.

If a country’s exports is more than its imports(Trade surplus) that appreciates the value of its currency. and may be depreciates when imports is more than its exports(Trade deficits)

An Increase in the general level of prices in the country that

is sustained over a period of time.

When demand is more than supply or increase the cost of

production , natural calamities etc. that's may lead to

inflation. inflation reduce the purchasing power of people.

Inflation rates in India is higher than rates in other countries,

this will increase imports reduce exports.

Interest rates influence the return or yield on bonds. bonds

of Indian companies can by only in Rupee

a high interest rate in India . will create demand for Rupee

in which to purchase those bonds

higher interest rates attract foreign capital and cause the

exchange rate to rise

Countries will engage in large-scale deficit financing to pay for public sector projects and governmental funding.

While such activity stimulates the domestic economy

nations with large public deficits and debts are less attractive to foreign investors.

Foreign investors inevitably seek out stable countries with

strong economic performance in which to invest their capital,

and the flow of foreign money increase the value of Rupee

Price of Oil & Gold

A large portion of India’s import payment is

mainly for payment of oil and gold. Their for any variation its

price will directly affect the Rupee.

Economy Industries

Foreign

investors

Common

people

Rupee appreciation against US dollar is a signal of the strengthening of Indian economy with respect to US economy.

Rupee Appreciation Rupee Depreciation

Import become Cheaper

hence they have gain.

Import become

costlier hence they

have loss

fall in export realization

to the extent of forex

difference hence they face

loss.

Realization from

exports increase. Hence

they have gain.

Importers

Exporters

When foreign investors invest in Indian stock market,

They can earn profit if Rupee appreciates.

They make a loss if Rupee depreciates.