Indian rupee goes global
2022-07-13The Reserve Bank of India (RBI) has announced that it is putting into place a mechanism for international trade settlements in rupees, designed to promote growth of global trade with emphasis on exports.
RBI said, “In order to promote growth of global trade with emphasis on exports from India and to support the increasing interest of the global trading community in INR, it has been decided to put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in INR.”
Indian importers undertaking imports through this mechanism need to make payment in rupees which must be credited into a Special Vostro account of the correspondent bank of the partner country, against the invoices for the supply of goods or services from the overseas seller or supplier.
Similarly, Indian exporters, undertaking exports of goods and services through this mechanism, must be paid the export proceeds in rupees from the balance in a designated Special Vostro account of the correspondent bank of the partner country.
The rupee becoming an international currency would likely reduce India’s trade deficit. The rupee will be strengthened in the global market. Other countries may start adopting the rupee as their trade currency.
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