Thursday, July 1, 2010

Symbol of Rupee

The newspapers are full of reports that there is move from government to prescribe an official symbol for our rupee. In fact, it had held a countrywide contest recently and has shortlisted the following five symbols one of which will be chosen finally


India Rupee Symbol

Many of us are rather intrigued by this news item. We wonder that when the denotation of our ‘rupee’ as ‘Rs….” is quite unambiguous why it is considered necessary to go in for this. For one thing a country’s currency is a sine qua non of the country. While the name rupee has been associated with our coin for quite some time and is moiré or less a defining sign of our currency it will be remembered that currencies of many countries also bear the same name. The Pakistan currency is also known as rupee currency since it has continued with the same name in use in undivided India even after partition. In the SE Asia also the coin is known by more or less similar names e.g. rupiah etc. However, the similarity of name does not necessary signify identical monetary value. We may remember that until around the middle of the last century the State of Hyderabad had a similarly named currency rupee and lower denominational value coins also. The State of Gwalior had Shindeshahee coins. These State issues had distinctly different designs to emphasise and bring out their individuality. The actual monetary value of the rupee differed. Thus a hundred rupees of Govt. of India fetched nearly 115 Hyderabadi rupees.These State coinage systems were a left over of the once independent status of the regions from Central rules .From the middle of the last century these subsidiary coinage systems were abolished and replaced with the uniform Indian rupee,.

However, while the promise on currency notes that the government guarantees to exchange it for coins/smaller evaluation notes of equal value (This did not obtain on small notes of Re.l) it was for internal exchange. In international transactions the monetary value differed, sometimes fluctuating widely depending on the exchange value .As a sideshow it may be mentioned that around 30s there was a keen debate as to whether the value of one Indian rupee should be equal to 16 pence or 17 pence which to an ordinary man appeared rather intriguing. wondering whether the matter could not be settled by a little give and take. It was a standard joke of the times. In the pre-WWII period the exchange rates of Indian rupee vis-a-vis British Pound (Rs. 15/-),American Dollar(Rs.Three and a half) etc were moiré or less steady .However, in the context of the post=war World Reconstruction ,the growing international trade and commerce they began to fluctuate depending on exchange of goods and services.

Deliberate attempts of keeping the exchange rates artificially high for boosting trade and commerce were and are also there. Earlier Japan had indulged in this. The Japanese goods were costlier in Japan than outside offering stiff competition to other goods. It is the turn of China now.Keeping its Yuan exchange rate artificially lower tomake its exports cheaper it is flooding world markets ,predominantlyEurope,US and India with Chinese goods However artificially maintaining a lower exchange rate would cause inflation in that country since being able to export in bulk would mean easy availability of local currency which would cause price rise. More money = more purchase = increased demand = price rise = inflation! And China is already experiencing this effect and is getting prepared to loosen its grip on its currency. Even the international community is demanding that China allow its currency to appreciate because no country can tolerate its markets being flooded from outside by cheap goods.

Indian Economy today is the fourth largest economy in the world and is expected to overtake Japan by 2012 to become the third largest. The second largest economy, China is in that position artificially by keeping its Yuan exchange rate artificially lower to make its exports cheaper and hence is flooding the world markets predominantly Europe, US and India.If China relaxes its currency Indian currency which is not controlled like the Chinese currency can continue to surge ahead and so would Indian GDP because the Chinese exports would then go down since their exports would no longer be cheaper with an appreciated Yuan, and this gives India a good chance to move on to the second largest GDPin the world only after United States, and this is predicted to happen sometime around 2020.

Given all this information, the government of India has finally realized that the Indian Currency Rupee needs a brand symbol too, just like dollar, pound, euro, yen etc. As of now Rupee is denoted by Rs and does not have a symbol of its own. A currency symbol represents the entire health of the country’s economy and if the country’s economy clicks, then it would become the monetary brand of the country worldwide, just like how $ represents the economic strength of United States . More than a billion people ie 1/6 of humanity are using this currency.

The currency symbols often become shorthand for the country. The fact that this symbol for rupees has been found through open competition is symbolic of India’s growing confidence in itself.

The different system of coinage obtaining in India in the past has already been mentioned above. However, these were mere leftover from history and in any case have been abolished over half a century ago. We did not have a problem like Europe where different currencies were current and had to be abandoned for the emerging Euro. Local populations across Europe complained that in this switchover retailers cleverly included a price hike.

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