Indian Currency: Definition, Conversion and Example

Indian Currency: Each country has its own currency. For example, the rupee is the currency of India, while the dollar is the currency of the United States. Currency is a system of money used by the people of a country daily. According to Mathematicians, currencies are a form of exchange, such as bills, coins, or demand deposits used to purchase goods and services.

Every product has a price. Money is used to pay for an item’s value or price. Here are some examples of how we can use the money to purchase them in real-life situations.

History of Indian Currency

A silver coin, the Sanskrit word rupyakam, is the root of the word rupee. In Sanskrit, the word ‘rupaalu’ means wrought silver or a silver coin. It was used in the same way that a coin is or was for stamped or impressed silver. The word ‘rupaalu’ is also an adjective meaning shapely. Noun ‘rupaalu’ refers to a person’s “shape, resemblance, or image.” 

Learn About Conversion of Money

There is some evidence to suggest that the word rupa has Vedic or Dravidian roots. The word rupa, a noun in Sanskrit, refers to a form or beauty (Rigveda). The adjective rupaka refers to a particular coin. ‘Rupya’ and ‘Rupiya’ are both adjectives that refer to something beautiful and stamped (Pini).

Money and Currency

In addition to food and other needs like toys and candies, you’ll also need money for things like movie tickets and retail therapy, as well as to pay for your automobile or rent an apartment. We can buy anything we want with the money. As a result, money is used to acquire products and services and compensate individuals for their labour.

Different countries may use different currencies. The Indian rupee \((₹)\) is the Indian currency.

The dollar is the official currency of the United States of America. Each country may have its unique currency.

In a country, money is issued in the form of notes and coins called currency. Currency can be defined as a system of money used by the people of a country daily. In addition to circulating coins and banknotes, money is used in any form as a medium of exchange. It is important to note that every country has its own currency. In different countries, different types of currencies are in circulation. Among few examples of currencies are the Indian Rupee, Euros, the Japanese Yen, and the US dollar.

Coins and Notes

Coins are small metal pieces that are flat, round, and approved by the government. In addition, it is used as a currency exchange. On their surface, they may have numerals or text. In terms of weight, they are standardised, and they are produced in large numbers. We often use some coins. These are \(₹1,₹2,₹5, ₹10\) etc.

There are few more coins apart from the coins mentioned above, such as \(₹20, ₹50, ₹60, ₹75, ₹100, ₹125, ₹150, ₹200, ₹500\), and \(₹1000\) introduced these, but we do not use these for transactions. Those are shown below.

Notes in India began as banknotes, which were notes issued by banks. Later, the British Government of India took over issuing currency notes in India and distributed them throughout the country. Paper money was standardised across the country.

They were given the authority to print currency in India after the Reserve Bank of India was established. The Reserve Bank of India (RBI) is the only institution to print and distribute paper currency.

The smallest denomination of Indian currency notes available is one rupee \((₹1)\), and the highest denomination in use now is two thousand rupees \((₹2000)\).

Converting Paise Into Rupees

We need to convert the money into different forms as per our requirement. Money can be converted into two forms.

1. Conversion of rupees to paise
2. Conversion of paise to rupees

Formulas

\(1\) rupee \(=100\) paise

\(100\) paise \(=1\) rupee

\(1\) paise \(=\frac{1}{100}\) rupees

Converting Rupees Into Paise Example

To transform rupees into paise, multiply rupees by \(100\). Or, to convert rupees into paise, shift the decimal point in the amount to two places towards the right.

For example: Convert \(10\) rupees into paise.

It is known that \(1\) rupee \(=100\) paise
Now, \(10\) rupees \(=10 \times 100=1000\) paise

Hence, \(10\) rupees is \(1000\) paise.

Converting Paise Into Rupees Example

To transform paise into rupees, divide the paise by \(100\). Or to convert paise into rupees, we need to shift the decimal point to two digits to the left from the rupee amount.

For example: Convert \(500\) paise into rupees.

It is known that \(100\) paise \(=1\) rupee
So, \(1\) paise \(=\frac{1}{100}\) rupees
Now, \(500\) paise \(=\frac{500}{100}=5\) rupees

Hence, \(500\) paise is \(5\) rupees.

Learn How to Convert Paise Into Rupees

Indian Currency Exchange Rate

The Indian exchange rate is when a market converts one Indian currency into another countries’ currency. Foreign exchange determines the exchange rate. In other words, it tells you how much your currency is worth in a different currency. It means how much of your currency can be exchanged for another country’s currency.

To buy one US dollar, how many Indian rupees are needed? It costs \(₹ 74.9178\) to buy \(\text {US}\, $1\) on August \({2^{{\text{nd}}}}\) in \(2021\).

The exchange rate does not remain the same over time. It can change from day to day in real-time. Some countries’ exchange rates frequently fluctuate, while others have a fixed rate.

Solved Examples – Indian Currency

Q.1. Convert \(400\) paise into rupees.
Ans: Here, we need to convert \(400\) paise into rupees.
We know that \(100\) paise \(=1\) rupee
So, \(1\) paise \(=\frac{1}{100}\) rupees
We also know that to convert paise into rupees, put a decimal point before two digits from the right. (Trick)
Now, \(400\) paise \(=4\) rupees (after moving decimal point before two digits from the right)
Hence, \(400\) paise is \(4.00\) rupees or \(4\) rupees.

Q.2. Convert \(75\) paise into rupees.
Ans: Here, we need to convert \(75\) paise into rupees.
We know that \(100\) paise \(=1\) rupee
So, \(1\) paise \(=\frac{1}{100}\) rupees
Now, \(75\) paise \(=75 \times \frac{1}{100}\) rupees
\(=0.75\) rupees
Hence, \(75\) paise is \(0.75\) rupees.

Q.3. Rina bought a doll from the United States from an online e-Commerce site from India. The cost of football was \($ \,30\). How much did she pay for the doll in Indian Rupees?
Ans: The cost of a doll was \(\$ \,30\) in the United States. As per the exchange rate on August \({2^{{\text{nd}}}}\), we know \(\$ \,1\) is equal to \(\ 74.9178\). So, the value of \(\$ 30\) is equal to \(30× ₹ 74.9178=₹ 2247.534\)
Therefore, the amount in Indian rupees she has to pay for the doll is \(₹ 2247.534\).

Q.4. Convert \(2 \,\text {Euro}\) into Indian Rupees.
Ans: We know that as per the exchange rate of August \({2^{{\text{nd}}}}\), \(₹ 88.35\) equals \(1 \,\text {Euro}\).
Then, \(2 \,\text {Euro}=₹\, 88.35×2=₹ \,176.7\)
Hence, \(2 \,\text {Euro}\) is equal to \(₹\, 176.7\).

Q.5. Convert \(200 \,\text {Rupees}\) into \(\text {US dollars}\).
Ans: We know that \(1 \,\text {Indian Rupee}=0.013 \,\text {USD}\)
Hence, \(200 \,\text {Rupees}=0.013×200=2.6 \,\text {USD}\)

Summary

In this article, we learned about Indian currencies and converting Indian currency to another nation’s currency. We discussed that each country has its currency, and various currencies are used in different countries. Indian Rupees \((₹)\) Euros \((€)\), Japanese Yen \((¥)\), US dollars \((US\,$)\), and Pounds Sterling \((£)\) are examples of currencies. We have learned to convert paise into rupees and vice versa.

Learn All the Concepts on Money

FAQs About Indian Currency

Let’s look at some of the commonly asked questions about Indian Currency:

Q.1. When was 1 dollar is equal to 1 rupee?
Ans: On August \(15\,\text {th} \,1947\), one dollar was equal to one rupee.

Q.2. How many countries have the rupee as their currency?
Ans: Rupee is the common name for the currencies of India, Indonesia, the Maldives, Mauritius, Nepal, Pakistan, Seychelles, and Sri Lanka, and of former currencies of Afghanistan, Bahrain, Kuwait, Oman, and the UAE (as the Gulf rupee), British East Africa, Burma, German East Africa, and Tibet.

Q.3. Which currency is the highest in India?
Ans: In \(2021\), Kuwaiti Dinar is the highest as per the Indian currency. One Kuwaiti Dinar is equal to \(₹ 247.15\).

Q.4. What are standard currency conversions in India?
Ans: The foreign exchange rate determines the standard currency conversion. It’s up to the government and the reserve bank to make that decision. Exports, imports, inflation, employment, growth rates, interest rates, etc., all affect currency value. The currency conversion rate as of August \({2^{{\text{nd}}}}\) \(2021\), is

Q.5. Which country money is lower than India?
Ans: There are ten countries whose currencies are lower than India. Nepal, Sri Lanka, Cambodia, Bolivia, Indonesia, Mongolia, Vietnam, Laos, Zimbabwe, Tanzania.

Q.6. What is meant by currency exchange rate?
Ans: The exchange rate is the rate at which a market converts one currency into another. In other words, it tells you how much your currency is worth in another country. It refers to the amount of your country’s currency that can be exchanged for another country’s currency.

We hope this detailed article on the Indian currency helped you in your studies. If you have any doubts, queries or suggestions regarding this article, feel to ask us in the comment section, and we will be more than happy to assist you. Happy learning!