historically, the rupee, derived from the sanskrit word raupya, which means "silver", was a silver coin. this had severe consequences in the nineteenth century, when the strongest economies in the world were on the gold standard. the discovery of vast quantities of silver in the u.s. and various european colonies resulted in a decline in the relative value of silver to gold. suddenly the standard currency of india could not buy as much from the outside world. this event was known as "the fall of the rupee".