Wednesday, June 27, 2007

A rupee but less

What happens when a rupee coin is worth less than the metal that is used to mint it? You take the rupee, melt the metal down and reuse it.

Thats what a few people in Kolkatta are doing. A rupee coin gives them enough metal to draw out five to seven razor blades. Their price in the Bangladeshi market across the border? Rs. 35.

And because this mass melting creates an acute shortage of coins, beggars can sell their currency at a premium - making a rupee worth more than a rupee. A terrific economic loop.

6 comments:

Mohammed S Nulwala said...

Well Its true. A day will come that man will strip his skin from his body and will sell it.

Mind Rush said...

Very interesting story. Wonder how the economics of producing these coins works for the RBI?

Aspi said...

Well, whatever it is - no one can accuse us being a closed economy :)

amitscorpio said...

very interesting economy we have and more interesting relations with our neighbors!! well atleast this gives answer to the reason for the acute shortage of the coins in india. Lets see how RBI deals with it!!

@Mind Rush: nice question ... really wonder how much a rupee coin costs them!!

Ankur said...

the same thing happened with 5p, 10p aluminum coins.

Aspi said...

I remember that ankur. Weren't they being used to make pressure cookers? Igenuity abounds.