Indian Rupee (₹) Sagar Mistry ARE 311 - Markets 03-21-18 - The Indian Rupee is the official currency of the Overview & Republic of India, and is issued by the Reserve Bank of India. Background - Similar to the dollar, 1 Indian rupee consist of 100 paise. - Ancient India traces back to the 6th century BC., and are believed to be the first users of coins as currency. - Sultan Sher Shah Suri (1486-1545), was said to issue the first rupee. 40 copper pieces was equal to 1 rupee. - Primarily know denominations are: Bills: INR 1, 2, 5, 10, 20, 50, 100, 500, 1,000 || Coins: 50 paise - Prior to the Indian Independence from British Overview & rule, each state in India had its own paise to rupee ratio. It took 10 years after the Background independence to finally split the rupee into 100 paise. (cont.) - The Indian rupee was fixed to the British pound from 1927-1946, then was fixed to the US dollar after independence. - In 1947, 1 rupee was equal to 1 US dollar - Since then, the Indian rupee has devalued to ~65.06Rs. / 1 US Dollar (03-18-18) - Cost of living - https://www.numbeo.com/cost-of-living/countr y_result.jsp?country=India - Total trades between the 2 countries in 2016 were ~$114.8 billion. Exports: $42 billion, US/India Bilateral Imports: $72.8 billion. - Ranked 9th largest in goods trading with the US. Trade(Import/exports) - The U.S. goods trade deficit with India was $24.3 billion in 2016, a 4.2% increase ($970 million) over 2015. Also a $6.5 service trade deficit. https://ustr.gov/countries-regions/south-central-asia/india Indian Rupee (₹) Sagar Mistry ARE 311 - Markets 03-21-18 - The Indian Rupee is the official currency of the Overview & Republic of India, and is issued by the Reserve Bank of India. Background - Similar to the dollar, 1 Indian rupee consist of 100 paise. - Ancient India traces back to the 6th century BC., and are believed to be the first users of coins as currency. - Sultan Sher Shah Suri (1486-1545), was said to issue the first rupee. 40 copper pieces was equal to 1 rupee. - Primarily know denominations are: Bills: INR 1, 2, 5, 10, 20, 50, 100, 500, 1,000 || Coins: 50 paise - Prior to the Indian Independence from British Overview & rule, each state in India had its own paise to rupee ratio. It took 10 years after the Background independence to finally split the rupee into 100 paise. (cont.) - The Indian rupee was fixed to the British pound from 1927-1946, then was fixed to the US dollar after independence. - In 1947, 1 rupee was equal to 1 US dollar - Since then, the Indian rupee has devalued to ~65.06Rs. / 1 US Dollar (03-18-18) - Cost of living - https://www.numbeo.com/cost-of-living/countr y_result.jsp?country=India - Total trades between the 2 countries in 2016 were ~$114.8 billion. Exports: $42 billion, US/India Bilateral Imports: $72.8 billion. - Ranked 9th largest in goods trading with the US. Trade(Import/exports) - The U.S. goods trade deficit with India was $24.3 billion in 2016, a 4.2% increase ($970 million) over 2015. Also a $6.5 service trade deficit. https://ustr.gov/countries-regions/south-central-asia/india - US Exports: 21st largest agricultural export Exports & Imports market. Leading domestic export categories include: tree nuts ($522 million), cotton ($250 million), pulses ($144 million), fresh fruit ($72 million), and planting seeds ($32 million) - . - US Imports: 20th largest supplier of agricultural imports. Leading categories include: spices ($279 million), rice ($158 million), tree nuts ($157 million), essential oils ($151 million), and processed fruit & vegetables ($114 million) INR ₹ vs. USD $ http://www.forecast-chart.com/usd-indian-rupee.html https://tradingeconomics.com/india/currency A Stronger US ***General Rule of Thumb*** - A weaker domestic currency stimulates exports Dollar leads to... and makes imports more expensive (and vice versa) From the American Point of View - As the Indian Dollar weaken, US Exports decrease. - Since the US Dollar is strengthening, Imports from India increase. Black Money coming to light. - In 2016, PM Narendra Modi announced the demonetisation of the 500Rs and the 1000Rs bills. - The goal was to crack down on the use of counterfeit cash that were being used to fund illegal activity and terrorism. - The entire country was required to come into the banks and turn in all there cash bills and have them electronically entered into a debit card type system. - Did this work? - By the end of 2017, 99% of the banned currency had been turned into the banks and only $171,757,600 worth of Indian rupees were discarded. ( $17 billion dollars of black market rupees turned “white”. References http://www.forecast-chart.com/usd-indian-rupee.html https://tradingeconomics.com/india/currency https://www.oanda.com/currency/iso-currency-codes/INR http://www.indianhiddengems.com/2015/08/the-history-of-indian-rupee-devaluation.html https://www.numbeo.com/cost-of-living/country_result.jsp?country=India https://ustr.gov/countries-regions/south-central-asia/india - US Exports: 21st largest agricultural export Exports & Imports market. Leading domestic export categories include: tree nuts ($522 million), cotton ($250 million), pulses ($144 million), fresh fruit ($72 million), and planting seeds ($32 million) - . - US Imports: 20th largest supplier of agricultural imports. Leading categories include: spices ($279 million), rice ($158 million), tree nuts ($157 million), essential oils ($151 million), and processed fruit & vegetables ($114 million) INR ₹ vs. USD $ http://www.forecast-chart.com/usd-indian-rupee.html https://tradingeconomics.com/india/currency A Stronger US ***General Rule of Thumb*** - A weaker domestic currency stimulates exports Dollar leads to... and makes imports more expensive (and vice versa) From the American Point of View - As the Indian Dollar weaken, US Exports decrease. - Since the US Dollar is strengthening, Imports from India increase. Black Money coming to light. - In 2016, PM Narendra Modi announced the demonetisation of the 500Rs and the 1000Rs bills. - The goal was to crack down on the use of counterfeit cash that were being used to fund illegal activity and terrorism. - The entire country was required to come into the banks and turn in all there cash bills and have them electronically entered into a debit card type system. - Did this work? - By the end of 2017, 99% of the banned currency had been turned into the banks and only $171,757,600 worth of Indian rupees were discarded. ( $17 billion dollars of black market rupees turned “white”. References http://www.forecast-chart.com/usd-indian-rupee.html https://tradingeconomics.com/india/currency https://www.oanda.com/currency/iso-currency-codes/INR http://www.indianhiddengems.com/2015/08/the-history-of-indian-rupee-devaluation.html https://www.numbeo.com/cost-of-living/country_result.jsp?country=India https://ustr.gov/countries-regions/south-central-asia/india .