Rupees are the official currencies of six countries of the Indian subcontinent and the surrounding Indian Ocean: India (INR), Pakistan (PKR), Sri Lanka (LKR), Nepal (NPR), Mauritius (MUR), and the Seychelles (SCR). As well, the names of the Indonesian rupiah (IDR) and the rufiyaa of the Maldive Islands (MVR) are based on the Hindi variant ‘rupiya.’ All these currencies source at least partly from the Sanskrit ‘rupyakam,’ appropriately meaning ‘silver coin,’ although many of these currencies also have links to the pound sterling. Some, such as the Mauritian rupee, replace the country’s original use of the Indian rupee.
Like the pound sterling, all modern rupee currencies have also been converted to a decimal structure. In India, Pakistan, and Nepal, 100 paise (paisa in Nepal) make a rupee, while in Sri Lanka and Mauritania, 100 cents make a rupee. In many cases, such as the Indonesian sen, the lowest divisions of the rupee have been rendered obsolete by inflation.
As the Sanskrit name suggests, all of these currencies were made from a silver alloy, the size and composition of which was originally standardized by Sher Shah Suri, who founded the Sur Dynasty in 1540 AD. Later, the British East India Company took over a similar standardization role, and the British India rupee or its exact metallurgic equivalent became a standard currency as far away as Somalia.
This also meant that like the pound sterling, the various rupee currencies were tied to a silver standard. When large silver deposits were discovered in the Americas during the 19th century, the silver-based rupees were seriously devalued. After the fall of the rupee, all rupee-based currencies abandoned the silver standard. The revalued Indian rupee was pegged indirectly to the gold standard by way of the pound sterling, and then in 1966 by way of the United States dollar. Other rupee currencies borrowed the gold standard stability by pegging their value to the Indian rupee. Others used a basket of currencies, such as the Seychelles formula of 59% euros, 31% United Kingdom pounds, and 10% United States dollars. The Bhutan ngultrum is still pegged at par to the Indian rupee.
All modern rupee currencies are now floating currencies, and are made from nickel-brass or cupro-nickel alloys or represented by banknotes. Nearly all lost a large percentage of their value upon conversion from a pegged value to a floating one, although after the foreign exchange crisis of the 1990s the Indian rupee is once again becoming a strong currency.
At present, a United States dollar is worth roughly 50 Indian rupees. This is subject to some change, although not as much as most floating currencies, because the Reverse Bank of India actively trades in rupees and other currencies to keep the exchange rate close to constant. As with most major world currencies, the Reverse Bank of India has also introduced increasingly sophisticated anti-counterfeiting measures into its rupees. As another tool of creating and supporting low volatility, the Indian rupee is also subject to customs rules limiting the import and export of rupees. Because the Indian rupee is the dominant currency of the Indian subcontinent and parts of southeast Asia, its value is closely watched by the currency markets.