The Indian rupee (INR) is the official currency of India, issued and regulated by the Reserve Bank of India. Denoted by the symbol ₹ and subdivided into 100 paise, it operates under a managed floating exchange rate system.

Originally introduced as a silver coin by Sher Shah Suri in the 16th century, the rupee evolved from a fiat currency under British colonial rule to a modern monetary instrument. Nepal and Bhutan peg their currencies to the rupee, highlighting its regional significance.

Key Features:

• Managed floating exchange rate system
• Value influenced by market forces and RBI regulation
• Freely convertible for trade and remittances
• Capital account transactions restricted for economic stability
• Growing shift toward digital payments and CBDC development

Factors Affecting Rupee Value:

• Inflation rates
• Interest rate differentials
• Foreign exchange reserves
• Trade balance
• Global market trends
• Foreign investment flows
• Oil prices (India imports 80% of crude oil needs)

Current Characteristics:

• Banknotes feature Mahatma Gandhi
• Advanced security features include watermarks and color-shifting ink
• Distinct colors and designs for different denominations
• Available in both coin and note forms
• Legal tender throughout India

The rupee continues to adapt to India's economic growth and modernization. While historical depreciation has occurred due to structural economic factors, the currency maintains stability through strong forex reserves and strategic RBI interventions. India's push toward digital payments and financial inclusion further strengthens the rupee's position in the global financial system.

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