Amazon Pay Payment Gateway: Introducing the Indian Rupee Currency

The rupee is used as a common currency in India, Pakistan, Sri Lanka, Indonesia, Nepal and Mauritius. The Prime Minister of India, Narendra Modi, announced on 8 November that the circulation of 500 rupee (approx. 7.5 USD) and 1,000 rupee (approx. 15 USD) banknotes would be halted from midnight on 9 November 2016 in order to combat corruption and money laundering.

The word "rupee" means "silver coin". In the 19th century, when the world's most powerful economies were standardised on gold, the discovery of large silver mines by American and European colonisers led to a decline in the value of silver relative to gold. India's inability to obtain a standard currency from abroad signalled the "decline of the rupee".

The Indian rupee is the official currency of India, abbreviated as Rs and coded as INR in ISO 4217.Locally, the rupee is known by different nicknames such as Taka, Tanka, Rubai, and Rupaye, and its sub-unit is known as the Paisa.The Reserve Bank of India (RBI) announced the setting up of a committee, headed by the former Deputy Governor Tarapore, on 21 March 2006, to formulate a roadmap for making the Indian rupee fully convertible. The committee started functioning on 1 May and submitted a feasibility report on 31 July to achieve full "liberalisation" of the rupee.

Chintamani, deputy governor of the Central Bank of Nepal, said on the 17th that the currency printed by China for Nepal is of higher quality, brighter in colour and at a lower cost.

There is a continuous focus on the exchange rate of the yuan against the US dollar due to economic and trade pressures exerted by the West, led by the United States. However, the currencies of two economies, India and China, the rupee and the yuan, are quietly competing.

In the first nine months of 2007, the rupee appreciated by 12.8% against the US dollar, 12.3% against the Japanese yen, and 4.8% against the strong euro.At the same time, there was a huge influx of foreign hot money into India, with foreign investment reaching $16.5 billion, more than double the $8 billion that flowed into the Indian stock market in 2006.In 2006, India's economy grew at a rate of 9.4%, the highest in 18 years.

In contrast, China's economic growth rate was 11% in 2006, the fourth consecutive year of double-digit growth, and is still accelerating in 2007. Despite the fact that China's economic growth rate is much higher than India's, the renminbi has appreciated by only 3.71 TP3T against the US dollar and has continued to depreciate against the euro in the first nine months of 2007. Clearly, as an emerging power, India is following the path of high currency value, while China is following the path of low currency value.

This high currency value strategy has sparked controversy in India. Some critics argue that it is dangerous to deviate from the Chinese development model. A low currency value encourages exports and attracts large amounts of foreign investment to establish an export industrial base in India, benefiting more people, especially the poor. China's manufacturing leadership and higher economic growth rate than India's are closely linked to its low currency value strategy.

However, proponents of high currency value argue that the appreciation of the rupee has helped India to curb inflation and protect consumer interests in a rapidly growing economy. Furthermore, high currency value forces Indian companies to upgrade their quality in international competition and may be more competitive in the long run. For example, despite a recent 18% increase in profits, Infosys, an Indian high-tech company, has seen its share price fall due to a strong rupee, raising investor concerns. This reflects the high standards faced by Indian companies and the need to reduce costs, upgrade product technology and add value to compete internationally.

It is difficult to generalise about the merits of high versus low monetary value development strategies. However, the performance of the rupee suggests that while India may not be able to catch up with China in terms of speed of development, its economy has overcome the hurdles that the Chinese economy has yet to cross. It is well known that the appreciation of the renminbi poses a threat to Chinese manufacturing. Some Indian media have even claimed that an appreciation of a few percentage points in the yuan could lead to the closure of many Chinese companies. China's strong exports depend on a low currency value. Meanwhile, India allowed the rupee to appreciate by about 121 TP3T in nine months without reducing economic momentum. Can China do the same?

Now, as China overtakes Japan to become the world's second largest economy, its economy is likely to continue to grow faster than India's in the coming years. However, India's economic growth may not be as quantitative as China's, but it may surpass it in terms of quality. For example, India's 70% exports to the US are technology exports, something China has yet to realise. India has nurtured a series of world-class companies that are able to compete with those of developed countries without relying on low monetary values. China is still dependent on cheap labour, a supply that is likely to diminish over the next decade. From an international perspective, India's high currency value maintains a better trade balance, insulating it from protectionist targets and facing fewer trade barriers in the future. Thus, the high value of the Indian rupee is worth watching and thinking about in China.