New Rs. 20 coin to replace Rs.20 note
Two sides of the new 20 rupee coin.
On March 3, the Central Bank (CB) issued into circulation a new Rs.20 commemorative coin to mark the 70th Anniversary of the CB. Five million coins have been minted by China Mint in Nickel-plated steel similar in all other respects to the limited edition of 3000 commemorative coin minted in Aluminum bronze that was issued on January 1 in a presentation box and sold for Rs.1300 each from the CB Museum. These circulation coins will be only available through commercial banks since the CB cash counter has been closed since the start of the pandemic.
This is the first time a Rs. 20 coin was minted and is expected to replace the Rs.20 currency note shortly. The Rs.10 note last printed with a 2006 date was replaced with a coin in 2009. Only time will tell if these Rs.20 coins will circulate, for the higher denomination coin to become familiar to the general public. Many of the CB commemorative coins are unfortunately not seen much in circulation. I suspect that the CB vault issues the regular issue in preference to the commemorative issue. This also makes it difficult for coin collectors to find these coins in circulation, and often only seen, sold by dealers, a few times the face value.
The Rs.20 denomination was first introduced as a banknote in 1979, the same year that saw the last Rs. 2 note printed. In 1981 a Rs. 2 commemorative coin to mark the Mahaweli project replaced the Rs. 2 banknote. A ‘Factor of Ten’ devaluation in the 40 years, has also taken the US$ exchange rate from about Rs.19.50 in 1981 August to about Rs.195 today. A ‘Factor of 10’ in 40 years represents an average depreciation against the US$ of about 6 per cent per year over that period. Also in 1981 December, the first Rs.1,000 note worth $60 was issued, and therefore a Rs.10,000 banknote now worth only about 51 can’t be too far in the future.
Coins are hardly seen now in circulation and rarely given back as change in public transportation. Back in 1941, a Gold Sovereign was worth Rs.10, which is worth about Rs.80,000 today. The 1/2 cent which demonetized that year as being of two smaller values was worth 1/2000 of a Gold Sovereign or Rs.40 today. A ‘Factor of 8000’ in 80 years represents an average devaluation of about 12 per cent per year over that period. So the Rs.20 coin is being introduced when it is worth only half of the 1/2 cent in Gold value when that was demonetized. (The writer maintains websites coins.lakdiva.org and notes.lakdiva.org).