Rand to Rupee Explained
BILATERAL RELATIONS AND TRADE BETWEEN INDIA AND SOUTH AFRICA – MONETARY CURRENCIES AND EXCHANGE RATES
India and South Africa share a rich cultural and varied economic history, with bilateral relations going back to the 1860s. After a long time lapse due to South Africa’s apartheid government, India re-established trade and business ties in 1993 after South Africa ended its institutionalised racial segregation. There is a major resident Indian community in South Africa.
2018 marked 25 years of India and South Africa re-establishing their economic and diplomatic relations and to commemorate the occasion, the first India-South Africa Business Summit took place in Johannesburg as a run up to the 10th BRICS Summit, also held in South Africa later that year.
The bilateral trade between the Republic of India and the Republic of South Africa have grown exponentially since the end of apartheid in South Africa in 1994. Both countries are former British colonies and full member states of the Commonwealth of Nations as Commonwealth republics and have since developed close strategic, cultural and economic ties within several multilateral groupings including BRICS, IBSA, the Indian Ocean Rim Association and the G20.
In 2019 India was South Africa’s second largest trading partner in Asia and ranks among South Africa’s top 10 trade partners.
WHAT A RUPEE IS AND WHERE IT IS USED
The rupee is a monetary currency currently used in countries like India, Pakistan, Indonesia, the Maldives, Mauritius, Nepal, Seychelles, and Sri Lanka. Formerly currencies use in Afghanistan, Tibet, Burma, British East Africa, German East Africa, the Trucial States, and all Arab states of the Persian Gulf (as the Gulf rupee) were also known as rupees. In Indonesia and the Maldives, the currency is called rupiah and rufiyaa respectively.
CURRENT DENOMINATIONS, ABBREVIATIONS, VALUATIONS OF THE RUPEE
In 1957 India adopted a decimalisation system.
Both the Indian and Pakistani rupee are subdivided into one hundred paise (the singular form is paisa) or pice. The decimalised paisa was originally named naya paisa meaning the “new paisa” to distinguish it from the erstwhile paisa which had a higher value of 1⁄64 rupee. The “naya” was dropped in 1964 and since then it is simply known as paisa. The Mauritian, Seychellois, and Sri Lankan rupees are subdivided into 100 cents and the Nepalese rupee is subdivided into one hundred paisa (singular and plural) or four Sukaas.
In present India (from 2010 onwards), the 50 paise coin (half a rupee) is the lowest valued legal tender. Coins of 1, 2, 5, and 10 rupees and banknotes of 5, 10, 20, 50, 100, 200, 500, and 2000 rupees are commonly in use for cash transactions.
The Reserve Bank of India controls the issuance of the Indian currency and the State Bank of Pakistan controls it in that country. The most commonly used symbol for the rupee is “Rs” but India adopted a new rupee symbol (₹) in 2010. The sign “₨” is used in Pakistan, Sri Lanka, Nepal, Mauritius and Seychelles.
The currency code for rupees, as used in financial data used on stock exchanges worldwide, is INR.
Large denominations of rupees are often counted in lac/lakh (100,000 = 1 lac/lakh, 100 lac/lakh = 1 crore/karor, 100 crore/karor = 1 arab, 100 arab = 1 kharab/khrab, 100 Kharab/khrab = 1 nil/neel, 100 nil/neel = 1 padma, 100 padma = 1 shankh, 100 shankh = 1 udpadha, 100 udpadha = 1 ank).
Terms larger than a crore are not generally used in the context of money, e.g. an amount would be called Rs 1 lakh crore (equivalent to 1 trillion) instead of Rs 10 kharab.
Most currency rankings show that the most popular India rupee exchange rate is the USD to INR rate.
ORIGIN OF THE WORD RUPEE
The word rūpaya is of Hindi-Urdu origin and derived from the Sanskrit word rūpya, which roughly translated means “wrought silver” or “a coin of silver”. It was first used as an adjective meaning “shapely”, or “stamped” or “impressed”, as in a coin, and derived from the noun rūpa which meant “shape”, “likeness”, or “image”. The word rūpa in turn was related to the Dravidian root uruppu, which means “a member of the body”.
The Rūpiya was the forerunner of the rupee and refers to a silver coin weighing 178 grains, minted in northern India by first Sher Shah Suri during his rule (1540 – 1545), and later adopted and standardised by the Mughal Empire. The weight remained unchanged till the 20th century.
HISTORY OF THE INDIAN RUPEE
The history of the rupee can be traced back to Ancient India around the 6th century BC. Ancient India was one of the first countries in the world that used coins, alongside the Chinese wen and Lydian (ancient region in western Asia Minor) staters.
India’s first coins were called ‘punch-marked’ because of the way they were manufactured. Designs changed frequently over the next few centuries as empires rose and fell. By the 12th century the Tanka was used as currency but during the Mughal period a unified monetary system was established with the silver Rupayya or rupee as currency.
THE RUPEE IN BRITISH INDIA
Although a colony of Britain, India never adopted the Pound Sterling. In 1825, British India adopted a silver standard system based on the rupee that contained 11.66 g (1 tola) of 91.7% silver, with an ASW of 0.3437 of a troy ounce. It was used like that until the late 20th century.
Both the Kabuli and the Kandahari rupee were used as currency in Afghanistan prior to 1891, when both were standardised as the Afghan rupee. The Afghan rupee in turn was replaced by the Afghan afghani in 1925. Tibet’s official currency was also known as the Tibetan rupee until the middle of the 20th century. East India Company rupees were also used in Australia for a limited period.
The rupee’s value being based on its silver content, had severe consequences for the currency late in the 19th century when the strongest economies in the world started using gold as standard. The discovery of vast measures of silver in the United States and various European colonies resulted in a decline in the value of silver proportionate to gold.
At the end of the 19th century, the Indian silver rupee also changed to a gold exchange standard at a fixed rate of one rupee to one shilling and fourpence in British currency, namely 15 rupees to one pound sterling.
Until 1959 the Indian rupee was also the official currency of Dubai and Qatar. Then India created a new Gulf rupee (known as the “external rupee”) to hinder the smuggling of gold. It was legal tender until 1966, when India significantly devalued the Indian rupee and the Qatar-Dubai riyal was established. The rupee and its subsidiary coinage were used at times in East Africa (from Somalia in the north and Natal in the south), Arabia, and Mesopotamia.
When the price of silver rose soon after the First World War, the rupee to increase to two shillings sterling in value. In British East Africa a new florin coin was introduced, bringing the currency into line with sterling and the florin was soon split into two East African shillings.
Until the rupee was decimalised, each circulating coin of British India had a different name. The rupee (11.66 g, .917 fine silver) was divided into 16 annas, 64 paise, or 192 pies. A paisa was equal to two dhelas, three pies, or six damaris. Other coins for half anna (adhanni, or two paisas), two annas (duanni), four annas (a chawanni, or a quarter of a rupee), and eight annas (an athanni, or half a rupee) were widely in use until in 1961. (The numbers adha, do, chār, ātha mean respectively half, two, four, eight in Hindi and Urdu. Two paisa was also called a taka.
After India’s independence in 1947 and the country becoming a republic in 1950, its modern rupee was adopted as the country’s sole currency and the use of other domestic coinage removed from circulation.
THE RAND AND WHERE IT IS USED
The rand is legal tender in the common monetary area between South Africa, Eswatini, Lesotho and Namibia, although the last three countries have their own currencies attached to the rand’s value. Before 1976 the rand was legal tender in Botswana too.
ORIGIN OF THE WORD RAND
The rand got its name from the Witwatersrand (English “white waters’ ridge”), the ridge upon which Johannesburg is built and where most of South Africa’s gold deposits are mined.
DENOMINATIONS, ABBREVIATIONS, VALUATIONS OF THE RAND
When referring to the currency, the abbreviation is usually upper case “R”, but the name is written “rand” in lower case in both English and Afrikaans.
The rand is subdivided into 100 cents (sign: “c”) and its ISO 4217 code is ZAR, from Zuid-Afrikaanse rand (South African rand); the ZA being a historical relic from Dutch and not used in any current context except the country abbreviation.
HISTORY OF THE SOUTH AFRICAN RAND AS CURRENCY
As a trading centre, multiple currencies circulated throughout South Africa, with the first official currency used the Guilder. During the late 17th century, the Rixdollar was used, the first South African currency to include paper notes. Since 1826, from British occupation, the country used sterling, while other currencies like Spanish dollars, US dollars, French francs, and Indian rupees continued to circulate.
The Reserve Bank of South Africa was established as the central bank in 1921 and on 14 February 1961, three months before the Union of South Africa became a republic, the rand was introduced as its official currency. It replaced the South African pound as legal tender, at the rate of two rand to one pound, or 10 shillings to the rand.
Coins were introduced in 1961 in denominations of 1⁄2, 1, 21⁄2, 5, 10, 20, and 50 cents, the smaller ones later discontinued. The 2-rand coin was introduced in 1989, followed by 5-rand coins in 1994. To curb counterfeiting, a new 5-rand coin with more security features was released in 2004. The first series of rand banknotes introduced in 1961 was in denominations of 1-, 2-, 10-, and 20-rand.
In 1966, a second series was released. All notes bore the image of Jan van Riebeeck. A 1978 series began with denominations of 2-, 5-, 10- and 20-rand, with a 50-rand introduced in 1984. The 1-rand note was replaced by a coin.
In the 1990s, the notes were redesigned with images of the Big Five wildlife species and coins were introduced for the 2- and 5-rand. In 1994, 100- and 200-rand notes were introduced. In 2012 a new set of banknotes bearing Nelson Mandela’s image was issued.
SOUTH AFRICAN RAND RATES AND A CURRENCY CONVERTER.
Most currency rankings show that the most popular South Africa Rand exchange rate is the USD to ZAR rate.
BRIEF EXCHANGE RATE HISTORY OF THE RAND
The rand has developed into a liquid emerging market currency, most commonly traded against the US dollar. Despite originally enjoying strong value in the ever-changing international economy, the system of Apartheid in South Africa ultimately caused the rand to lose footing on the global market.
From the time of its inception in 1961 until late in 1971 one rand was worth US$1.40. thereafter its value fluctuated as various exchange rate dispensations were implemented by the South African authorities. In 1974 the South African authorities delinked the rand from the dollar and introduced a policy of independent managed floating. At the time it was trading at 87 cents to the dollar.
Several factors however affected the exchange rate. By the early 1980s, high inflation and mounting political pressure and sanctions due to international opposition to the apartheid system, had started to erode its value. By 1985 it had weakened to R 2.40 per dollar, recovered somewhat between 1986–88, but by the end of 1989, was trading at more than R 2.50 per dollar. By the 1994 general election it had weakened to over R 3.60 to the dollar and by 1999 to over R 6 to the dollar. The rand/dollar exchange in the post-apartheid South Africa had been largely impacted by national and international social, political and economic events.
The controversial land reform programme of Zimbabwe, followed by the September 11, 2001 attacks, sent it to R 13.84 to the dollar in December 2001.
This sudden depreciation led to a formal investigation, in turn leading to a dramatic recovery but in 2006 resumed its downward slide. In January 2014, the rand slid to R11.25 to the dollar and over a four-day period in December 2015, it dropped over 10% due to a surprise replacement of then Finance Minister Nhlanhla Nene with the little-known David van Rooyen. This further damaged international confidence in the rand, causing an all-time low of R 17.9169 to the US dollar on 9 January 2016.
In 1983, the apartheid government abolished the financial rand exchange rate system and key international banks refused to renew credit lines for South Africa, which forced the temporary closure of the foreign-exchange market in the country.
INDIAN RUPEE RATES AND CURRENCY CONVERTER.
The INR is a managed float, allowing the market to determine the exchange rate.
BRIEF EXCHANGE RATE HISTORY OF THE RUPEE
RUPEES TO RAND TODAY
On 14 January 2020 the rupee to rand exchange rate was 1 rupee: 0,20 South African rand. For the past six months the minimum rate was 1: 0.19620 (on December 31, 2019) the average rate was 1: 0.20720 and the maximum was 1: 0.21644 (on August 19, 2019)
On the same date the rand to rupee exchange rate was 1: 4,92 Indian rupees