It takes two to tango. In the context of India’s bold step towards opening up settlement of foreign trade in rupee, a twining of geopolitical and economic uncertainties and India’s own enhanced global economic positioning have set the stage for the global acceptance of the rupee for international trade by letting settlements happen in Indian currency, instead of US dollars. The July 2022 scheme of the Reserve Bank of India (RBI) permitting Rupee settlement of external trade will allow investing additional rupees in Indian markets and government securities, facilitate growth of global trade with emphasis on export from India and support the interests of the global trading community in Indian rupees.
The RBI decision also comes at a time when the Russia-Ukraine conflict has increased significant volatility in the forex markets which has impacted the performance of Indian Rupee. The Rupee has depreciated from Rs 74.51/USD on 1 January 2022 and has been hovering around INR 82/USD in recent days. The continuous depreciation of the Rupee is not in favour of exporters, importers and investors, says a PHD Chamber of Commerce & Industry report. According to Deepak Kumar, Executive Director RBI, the value of cross border transactions are 150 trillion in 2022, out of which 80 per cent in dollars and In 2030, 150 could become 300. “We are not saying that dollar prominence should come down, but rupee prominence should go up. We are aiming for rupee acceptance, rupee related and that currency paired rupee market should develop liquidity and depth,” says Kumar who feels India is opportunely placed to fulfil these goals. “The economic condition of the USA is in the opposite direction. There will be a liquidity crisis, so we should use this vacuum to squeeze in and occupy that place,” adds Kumar.
Esta historia es de la edición January 22, 2023 de The Sunday Guardian.
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Esta historia es de la edición January 22, 2023 de The Sunday Guardian.
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