Currency:Paper Notes and Metal Coins
A currency is "paper" banknotes and metal coins. Each Country generally issues its own currency. Different countries of the world have different currencies. Each currency has a main currency unit and a fractional currency, often valued at 1/100 of the main currency. Ex: currency in India is Rupee and paisa with 100 paisa = 1 Rupee and, Currency in United States of America is U.S Dollar and cents with 100 cents = 1 dollar.
This section covers following:
World currency, Currency with similiar name used in different places. Indian Rupee Studying Money,,
History of money:Till 1200 B.C, History of Money:Metals, History of Money: Banknotes , Kinds of Money
How many currencies are there in the world? Can you guess. Currently there are 182 official currencies. To check out the list go to wiki To find out about different currencies you can check out Google currency
Word Dollar currency of USA and many other countries has been derived from 16th century German: "Thaler" a short form of Joahimsthaler, coin made from metal mined in Joahimsthal, a town now in Czech Republic. Currency, Dinar used in many countries, is derived from Latin: "Denarius" which means Silver Money . IBNS website has information on origins of the currency name. To find it Click here .
|Name of Currency||Country||Meaning|
|Afghani||Afghanistan||derived from country name: "that belongs to or that is from Afghanistan"|
Latin:"Australis" - coming from the South, outhern, "Auster" - the South wind
|Balboa||Panama||Vasco Nunez de Balboa - Spanish explorer who discovered the Pacific Ocean (1475-1519)|
|Bolivar||Venezuela||Simon Bolivar - Venezuelan statesman who revolted against Spanish rule, founded Bolivia in 1825 (1783-1830)|
|Cent, Centavo, Centime||Many countries||Latin: "centum" - a hundred, used in the meaning of "a hundredth"|
|Colon||El Salvador, Costa Rica||Cristobal Colon is the Spanish name of Christopher Columbus, explorer who discovered America (1451-1506)|
|Cordoba||Nicaragua||Francisco Fernandez Cordoba - Spanish explorer who discovered Yucatan (1475-1526)|
|Cruzado||Brazil||from the Portuguese verb "Cruzar: to bear a cross" - early Portuguese gold or silver coins that beared a cross on reverse|
|Cruzeiro||Brazil||from Portuguese word: "Cruz" - Cross|
|Dalasi||Gambia||A Gambian native name|
|Denar||Macedonia||derived from "Dinar"|
|Dinar||Many countries||Latin: "Denarius" - Silver Money|
|Dirham||Morocco, UAE||the origin is from Old Greek word "Drakhme" which came to Latin as "Drachma" meaning "a handful"|
|Dobra||St.Thomas and Principe||Portuguese: Fold, folding|
|Dollar||USA and many other countries||from 16th century German: "Thaler" a short for of Joahimsthaler, coin made from metal mined in Joahimsthal, a town now in Czech Republic|
|Drachma||Greece||Old Greek: "Drakhme" - "a handful"|
|Dram||Armenia||the origin is from Old Greek word "Drakhme" which came to Latin as "Drachma" meaning "a handful"|
|Euro||European Union||derived from Europe. This name was the winning choice in a contest in 1996, and was invented by a group of scholars in Spain. (with special thanks to Dr. Roberto Cacciamani)|
|Escudo||Portugal, Cape Verde||Portuguese: Shield displaying coat of arms; from Latin: Scutum|
|Forint||Hungary||from Italian word "Fiorino" - Florin|
|Franc||France and other French speaking countries||14th century French word derived from Latin phrase: Rex Francorum - King of the Franks, inscribed on 14th century francs.|
|Gourde||Haiti||A tropical American evergreen that produces large round gourds, also means "heavy" in French|
|Guarani||Paraguay||Indigenous people living in Paraguay and Bolivia|
|Gulden||Holland, Surinam, Netherlands Antilles||Dutch: Golden|
|Hryvna||Ukraine||A medieval Russian monetary unit (coin) equivalent to 10 kopeks|
|Inti||Peru||a regional word from Quechua, Peru|
|Koruna||Czech Rep., Slovakia||Czech: Crown, head from Latin "Corona"|
|Krone||Scandinavian currencies||Latin: "Corona" - Crown|
|Kroon||Estonia||Latin: "Corona" - Crown|
|Kuna||Croatia||Croatian : a small furred animal|
|Kwacha||Malawi, Zambia||from a native word in Zambia|
|Lempira||Honduras||Lempira is an Indian Chief who opposed the Spanish|
|Leone||Sierre Leone||derived from country name|
|Leu||Romania, Moldova||Romanian: "Lion"|
|Lira||Italy, Turkey, Malta, San Marino||Latin: "Libra" - "Scales" or "Pound"|
|Manat||Azerbaijan, Turkmenistan||derived from the Russian word for coins "Manyeta" (spells as "moneta")|
|Mark||Germany||Old English: "Marc" is a unit of weight of precious metals perhaps from the marks on metal bars.|
|Markkaa||Finland||Most probably its etymology is the same as "Mark"|
|Mongo||Mongolia (coins)||Mongolian: "Mongo" - Silver|
|Naira||Nigeria||Altered from the word "Nigeria"|
|Peseta||Spain||diminutive of Peso|
|Peso||Many Spanish speaking countries||Spanish: "Weight"|
|Pound Sterling||England and many other countries||Old English: "Pund" from Latin word: "Pondus" - Weight; Sterling is drived from old English word "Steorra" - Star, referring to a small star on early Norman pennies|
|Punt||Ireland||Irish Gaelic: Pound|
|Quetzal||Guatemala||Spanish: a bird; zool: Pharomachrus mocinno|
|Rand||South Africa||In Dutch, Rand is a kind of "Security Deposit"|
|Renminbi Yuan||P.R. of China||In Chinese "Renminbi" is the "People's currency"; "Yuan" is literally "Round Object"|
|Rial||Iran, Oman||Persian version of the Arabic word "Riyal" which is derived from the Spanish word "Real"|
|Riyal||Many Arabic speaking countries||derived from the from Spanish word "Real"|
|Ruble||Russia, Belarus||Russian: rubl "Silver Bar" from the verb "Rubit"- "to cut up"|
|Rufiyaa||Maldives||derived from "Rupee"|
|Rupee||India, Pakistan, Nepal and others||from Sanskrit word "Rupya" - Silver|
|Rupiah||Indonesia||derived from "Rupee"|
|Shekel||Israel||16th century Hebrew: any coin or money|
|Shilling||UK (old), Kenya, Uganda, Tanzania etc||from the Old English and Old High German verb "Scilling" - "to Divide"|
|Sol||Peru||Latin: "Solidus" - copper or silver coin|
|Som||Kyrghyzstan||Kyrghyz: Pure (gold)|
|Somoni||Tajikistan||named in the honour of Ismoil Somoni - the founder of the first Samanid (Tajik) State|
|Sucre||Equador||Antonio Jose de Sucre - South American liberator who revolted against Spain, first president of Bolivia (1795-1830)|
|Sum||Uzbekistan||pronounced as Som - Uzbek: Pure (gold)|
|Tenge||Kazakhstan||Kazakh (and also other Turkic languages): Balance, scales|
|Tolar||Slovenia||Most probably derived from the German word "Thaler" as the "Dollar".|
|Yen||Japan||from Chinese word "Yuan" - a round object|
In India currency is issued in denominations of 1, 2, 5, 10, 20, 50, 100, 500 and 1000 rupees. Large denominations of rupees are often counted in lakh (100,000 = 1 Lakh, 100 Lakh = 1 Crore/karor, 100 Crore/karor = 1 Arab , 100 Arab = 1 Kharab/khrab, 100 Kharab/khrab = 1 Neel, 100 Neel = 1 Padam, 100 Padam = 1 Rajam, 100 Rajam = 1 Uroos). For details check out RBI: Indian Coinage , Indian-coins.com and Indian-notes.com
Just as people and businesses buy and sell things, countries also need to buy and sell things.
An import is any good brought into one country from another country For ex:India imports crude oil, machinery, fertilizer, chemicals
An export is any good sent into one country from one's country For ex:India exports textile goods, gems and jewelry, engineering goods, chemicals, leather manufactures.
How would different countries pay to each other? Usually countries use American Dollar for buying and selling. Since World War II American Dollar is used as global currency. It also tends to be the international pricing currency for products traded on a global market, such as oil, gold etc. example: Barrel of oil is $80 and 1 gm of gold is $1050.(Note: price of these things keeps on changing)
Many of the world's currencies are pegged against the dollar. Some countries, such as Ecuador, El Salvador, and Panama, have gone even further and eliminated their own currency in favor of the United States dollar. Since 1999, the dollar's dominance has begun to be eroded by the euro, which represents a larger size economy, and has the prospect of more countries adopting the euro as their national currency. As of December 2006, the euro surpassed the dollar in the combined value of cash in circulation. The value of euro notes in circulation has risen to more than $610 billion, equivalent to US$800 billion at the exchange rates at the time ( equivalent to circa US$968 billion)
In March 2009, as a result of the global economic crisis, China and Russia have pressed for urgent consideration of a global currency US President Obama, however, rejected the suggestion stating that "the dollar is extraordinarily strong right now."
Currency with similiar name used in different places
When we say Dollar we need to specify which dollar? Because Dollar can be Australian Dollar, Liberian
Dollar, Malaysian Dollar, US Dollar, Singapore Dollar. So saying only Dollar, is not enough.
Similarily Rupee is also the currency of
Mauritius, Nepal, Pakistan, Seychelles and SriLanka.
So how does one differeniate between different currencies?The standard way of naming the currency is:
two-letter abbreviations of country and prepend the first letter of the currency name.
For ex:USD for the United States Dollar, INR for Indian Rupees.
The two letter abbreviations of country are defined in ISO's 3166 (Codes for the Representation of Names of Countries). The Standard which defines the currencies is called as ISO 4217 (Codes for the Representation of Currencies and Funds) Read more about codes for currencies
Official Indian currency is Rupees & paisa. 1 Rupee = 100 paisa. The contemporary Indian notes are of Rs 5, 10, Rs 20, Rs 50, Rs 100, Rs 500 & Rs 1000 denomination. Contemporary notes show the portrait of Mahatma Gandhi on the face & hence are called as Mahatma Gandhi series. They have been in circulation since 1996. To see, indian notes currently in circulation Click here . To play jigsaw puzzle of India rupees Click here (Reference: RBI website)
The Reserve Bank has the sole authority to issue, distribute and handle banknotes in India. All bank notes of India carry the signature of Reserve Bank of India's Governor's signature(except 1 Rupee note which has the Finance secretary's signature). Currency notes are printed at the Currency Note Press, Nashik, Bank Note Press, Dewas, Bharatiya Note Mudra Nigam (P) Limited presses at Salboni and Mysore and at the Watermark Paper Manufacturing Mill, Hoshangabad.
Coins in India are presently being issued in denominations
of 10 paisa, 20 paisa, 25 paisa,
50 paise, one rupee, two rupees, five rupees and ten rupees.
Coins up to 50 paisa are called 'small coins' and coins of Rupee one and
above are called 'Rupee Coins'. The coins commonly in circulation are 1, 2, 5 & 10 rupees. Although they
remain valid, paise coins have become increasingly rare in regular usage.The Government of India
has the sole right to design and mint coins.
Coins are minted at the four India Government Mints at Mumbai, Alipore(Kolkata),
Saifabad(Hyderabad), Cherlapally (Hyderabad) and NOIDA (UP). .
To see coins currently in circulation
Click here .
Coins have a history of thousands of years. They are often valuable sources of information about the nations
and rulers who had these coins minted.
Numismatist The word 'numismatist' comes from the Greek nomisma meaning 'coin'. A numismatist, therefore, is somebody who studies coins and other types of money. Numismatics is an ancient discipline. Julius Caesar is often credited with writing the first book on numismatics. Numismatics can include the study of many different aspects relating to coins, including history, geography, economy, metallurgy, usage and manufacturing processes. Numismatists are sometimes differentiated from coin collectors in asmuch as the latter chiefly derive pleasure from the simple ownership of monetary devices, whereas the former are more concerned with acquiring knowledge about monetary devices and systems
Notaphily is the study of paper money or banknotes. A notaphilist is a collector of banknotes, paper money, paper currency or plastic notes.
Historians: Historians study designs and inscriptions on coins to get detailed information about political history, religion and culture. Unlike most objects studied by historians, coins were officially produced by the state rather than privately made by individuals. This means the type of information they can provide is often different from that provided by other artefacts. They can also tell us about economies for which we have little or no written evidence.
Archaeologists Coins are one of the most commonly found archaeological objects. Being made of metal, coins have tended to survive much better than less durable objects. Also, because they are valuable, they have often been concealed for safe keeping in hoards. Most coins can be dated, which is crucial to interpreting them<
Indian Institute of Research in Numismatic Studies (IIRNS), located Nasik (Maharashtra), is the only Institution in India devoted exclusively to Numismatic Studies. Established with the prime objective of facilitating and promoting research in Indian Numismatics
History of money:Till 1200 B.C
To trace history of money we have to realise What is money?
Money is a medium of exchange for trade. It can be a medium of exchange because it has a clear value that is trusted by everyone.
Money is also a way to store value for the future . So, for example, we can save up our money to buy something expensive in the future.
Finally, money is also a unit of account . It can be counted easily and it enables a clear value to be given to goods. Let's trace the history of money which follows history of man
9000-6000 BC : The first people didn't buy goods from other people with money. They used barter. Barter is the exchange of a good or service for another good or service, a bag of rice for a bag of beans. This kind of exchange started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock was often used as a unit of exchange. Later, as agriculture developed, people used crops for barter. For example, one farmer could exchange kg of apples for a kg of bananas. However, what if you couldn't agree what something was worth in exchange or you didn't want what the other person had. To solve that problem humans developed what is called commodity money
A commodity is a basic item used by almost everyone. In the past, salt, tea, tobacco, cattle and seeds were commodities and therefore were once used as money. However, using commodities as money had other problems. Carrying bags of salt and other commodities was hard, and commodities were difficult to store or were perishable. So people looked for other things to be used as money
1200 BC Cowrie Shells: Shells of clams, called cowrie(to see images click here ), were first used as money in China. They were found in shallow waters in Indian & Pacific Oceans. Till 20th century they were still being used in Africa. In inland areas of China due to shortage of cowrie shells, cowries were made from various materials such as bone, wood & metal.
History of Money:Metals
1000 - 600 BC : Metal was more practical than other forms of primitive money: it had a practical value (for use in jewelry, etc.); it was small enough to transport in one's pocket (unlike, say, an equally valuable horse); it did not die like cattle; it was durable (i.e., it did not decay or break). Crude coins made from non-precious metals. The first metal coins were actually cowrie shell reproductions made of bronze or copper. China began minting them around 1,000 B.C.
700 BC Precious Metal Coins: In Western World coins were made in Lydia, modern day Turkey. The coins, unlike in China, were made from gold and silver. They were stamped with Gods & s Greeks and Romans also started making coins. Coins became popular throughout Europe as trading grew. Coins containing precious metals were traded because it held value. For example, the value of the coin depended upon the amount of gold and silver it contained.
Due to shortage of copper, Chinese started using paper money way back in 618-907 A.D. In 1300 AD money was crude paper made from mulberry bark & Chinese placed the emperor's seal. Around 1454 Chinese abandoned paper money. It reappeared in Europe & America in 1600 A.D.
Goldsmith's receipts: In Europe during 1600's Many London merchants would deposit their gold in the secure storage rooms of the city's goldsmiths for safekeeping; the goldsmiths would give receipts for the deposits. As more goldsmiths began to issue these paper receipts, it became possible to take a receipt to any smith and cash it in, even if this smith wasn't the smith who originally wrote the receipt. Eventually, people were using the receipts among themselves, trading them for goods and services. People grew accustomed to this paper currency, and they began to trust its value. However, this is not much of an abstraction, because the receipts could be cashed in for gold, which had a "real" value.
Standardization of coins. History
History of Money: Banknotes
Fractional reserves The goldsmiths (like modern-day bankers) began to lend their depositors' gold. At any one time, there would not be enough gold to cover all of those deposit slips. Thus, the slips were not worth the gold which they represented; they were worth only as much as the smith's promise to redeem them .
The first European banknotes were printed in Sweden. In 1644 copper plate money was minted. In 1657, Stockholms Banco suggested a new monetary unit - a temporary "Kreditivsedlar" (credit paper). It printed the first banknotes in 1661. The bank very quickly got into trouble for printing too many bank notes. In 1816, England made gold a benchmark of value. This meant that the value of currency was pegged to a certain number of ounces of gold. In the late 1800s, the U.S. government issued gold and silver certificates.
World War I and World War II made countries distance from the gold standard. Till then the government could print as much money as the
amount of gold/silver it had. To finance the wars, rebuild and to recover the damage to the economy, governments wanted to print more money.
So they dropped the concept of exchanging paper money for gold or silver. The world moved to the paper money where notes have no value
otherwise,but for what they will buy. It can be offered in payment and by law it could not be refused as a settlement. In other words paper money is legal tender.
Such Money cannot be redeemed for a commodity, such as gold or silver.
Electronic money (also known as e-money, electronic cash, electronic currency, digital money, digital cash or digital currency) refers to money or scrip which is exchanged only electronically. Typically, this involves the use of computer networks, the internet and digital stored value systems. Electronic Funds Transfer (EFT) and direct deposit are all examples of electronic money.
Standardization of coins. History
Kinds of Money
Commodity Money Commodity Money consists of commodity or thing used as money. For example: Many items have been used as commodity money such as precious metals, cowry shells, barley, beads etc., as well as many other things that are thought of as having value. In post-war Germany, cigarettes became used as a form of commodity money. Ex: When Europeans came to the Americas, they used wampum as a medium of exchange, as shown in picture.
Representative money also known as specie money is money distributed, normally as paper money, that is assigned value based on valuable minerals tied to the paper money. The idea is that with specie backed money, though the paper itself holds no true value, it represents whatever mineral is held in reserve, historically gold and silver. In USA gold certificates were issued which could be exchanged with actual gold. Ex:Gold certificate of USA in 1800's
Fiat money refers to money
that is not backed by reserves of a commodity. Word Fiat is derived from
Latin which means "let it be done". It is a Legal tender i.e a of money that a government decrees
must be accepted in payment of debts , so it a promise to pay.
paper currencies have no inherent
value in them. Checkout
A Good article on "Promise to Pay". How worthless the paper currency can be, see the examples:
There is story about a woman from Germany who used a wheelbarrow with her money in it to buy a loaf of bread. When she came out of the shop, she found that her money was there but her Wheelbarrow was stolen as wheelbarrow was worth more than the money it had, which were reduced to being just pieces of paper.
Before June 2009, 100 trillion Zimbabwe dollars were not enough to buy a loaf of bread? Critics blamed President Robert Mugabe and his policies for the country's disastrous economic condition. Zimbabwe currency on CNN