5 Rupees – India

In 1996, India's currency situation was characterized by a period of relative stability and consolidation following the profound economic reforms initiated in 1991. The Indian Rupee (INR) was operating under a managed float system, where the Reserve Bank of India (RBI) intervened to curb excessive volatility while allowing market forces to influence the exchange rate. This was a significant shift from the earlier pegged regime and helped build foreign exchange reserves, which had recovered from the critical lows that precipitated the 1991 crisis. Inflation, though moderated from previous highs, remained a persistent concern for policymakers, influencing monetary decisions aimed at maintaining macroeconomic stability.

A key feature of the year was the introduction of the "Mahatma Gandhi Series" of banknotes, starting with the ₹10 and ₹500 denominations. This series, which remains in circulation today (with subsequent redesigns), incorporated enhanced security features like intaglio printing, watermarks, and latent images to combat counterfeiting. This redesign was part of a broader, ongoing modernization of India's currency infrastructure. Furthermore, 1996 saw the continued process of "current account convertibility," which had been established in 1994, allowing for freer foreign exchange transactions related to trade and services, thus further integrating India with the global economy.

However, underlying challenges persisted. The fiscal deficit remained high, exerting inflationary pressure and constraining the government's ability to invest in infrastructure. Externally, the East Asian Financial Crisis was brewing, and while its full impact would hit in 1997, it served as a cautionary tale for Indian policymakers about the vulnerabilities of open capital accounts. Consequently, India maintained capital controls, which provided a buffer. Overall, 1996 was a year of cautious progress, where the reforms of the early 1990s were being institutionalized, setting a foundation for future growth while navigating domestic fiscal pressures and emerging global economic uncertainties.