Economics

What is the Currency of Pakistan?

The official currency of Pakistan is the Pakistani rupee.

Pakistani Rupee

The Pakistani rupee is the official currency of Pakistan. The State Bank of Pakistan, which is the country's central bank, issues the currency. The sign Rs is usually used to represent the rupee. It is commonly pronounced as “rupaya,” “rupaye” or “rupees” in Pakistan.

History

Rūpiya is a word borrowed from the Sanskrit word rūpya which stands for “a coin of silver, wrought silver,” a descriptive word that means shapely. The rūpaya used to refer to the coin that Sher Shah Suri started issuing during his regime from 1540 to 1545 CE.

In 1947, the dissolving of the British Raj led to the introduction of the Pakistani rupee. Before then, Pakistan used British Indian notes and coins with “Pakistan” over-stamped on them. In 1948, an introduction of new banknotes and coins took place, subdivided into 16 annas. However, the currency was converted into decimals on January 1, 1961. The rupee was divided into 100 pice later the year. No coins designated in paise have ever been produced since 1994.

Coins

The denominations of 1 pice, ½, 1, and two annas, ¼, ½, and 1 rupee entered the market in 1948. An addition of 1 pie coins occurred in 1951. The issuance of the 1, 5, and ten pice and one paisa, 5, and ten paise coins took place the year 1963, although 1, 5, and ten pices came first. The 1 rupee coins re-entered the market in 1979 while 2 rupees and 5 rupees joined in 1998 and 2002 respectively. The production of the 5, 10, 25, and 50 paise stopped in 1996. Most of the rupees between the present two types have clouds on top of Badshahi Masjid. There were changes of 1 and two rupees to aluminum in the year 2007.

Since 2003, the 1 rupee has remained the only minimum legally accepted coin for tendering after the legal use of the paisa designated coins stopped. On October 15, 2015, the government of Pakistan issued a reviewed 5 rupee coin with a lesser weight and smaller size which is made of copper-nickel-zinc composition.

Banknotes

On April 1, 1948, India’s government and the Reserved Bank of India produced and circulated probationary notes on behalf of the Pakistani government. These notes were used only in Pakistan with no buybacks in India.

The government issuance started in 1948 and they were issued in 1, 5, 10, and 100 rupees until 1980s when production of 1 rupee notes ceased while the State Bank of Pakistan assumed the responsibility of producing other notes. The 2, 5, 10, and 100 rupees banknotes were circulated in 1953. An addition of 50 rupees in 1957 was followed by reintroduction of 2 and 500 rupees in 1986 and 1987 respectively. Additional notes of 20 and 5,000 rupees occurred in 2005 and 2006 respectively. The banknotes featured Bengali, the state language in Bangladesh (former East Pakistan) until the year 1971.

The image of Muhammad Ali Jinnah appeared on all notes apart from the 1 and 2 rupees on the faces while the backs have different features with text written in English. Also, all banknotes have a watermark to improve security issues with various sets of other security threads featuring on every note.

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