Rupee inches to REPLACE DOLLAR in global trade

Rupee inches to REPLACE DOLLAR in global trade -Dedollarisation

The Indian rupee is inching closer to becoming a global currency, replacing the US dollar in cross-border trade. India has been making significant efforts to promote the use of the rupee in international trade, and these efforts are beginning to pay off.

The Indian government has been working on various initiatives to promote the use of the rupee in cross-border trade. One of these initiatives is the establishment of special rupee Vostro accounts in authorized banks in India. These accounts enable foreign companies to hold their funds in Indian banks in rupees, and then transfer the funds to Indian exporters when necessary. This mechanism reduces the dependence on the US dollar in international trade and promotes the use of the Indian rupee.

India has also been at the forefront of payment technology innovation, with the unified payment interface (UPI) being a prime example. The focus is now on the digital rupee, which has the potential to further increase the appeal and adoption of the currency in global trade.

The use of local currencies in cross-border trade is gaining momentum, as more and more countries look to reduce their dependence on the US dollar. The global pandemic has also accelerated this trend, with countries seeking to reduce their currency risks and protect their economies.

India’s efforts to promote the use of the rupee in cross-border trade could have significant implications for the global economy. It could potentially increase the appeal of the currency and reduce the dominance of the US dollar in international trade. The establishment of special rupee Vostro accounts in 18 countries, including Russia and Sri Lanka, is a significant step towards this goal.

Nuriel Rabini, an economist and financial expert, has predicted that the Indian rupee could become one of the world’s reserve currencies. While this may seem ambitious, it highlights the potential impact of India’s efforts to promote the use of the rupee in international trade.

In conclusion, the Indian rupee is inching closer to becoming a global currency, replacing the US dollar in cross-border trade. India’s efforts to promote the use of the rupee in international trade are beginning to pay off, and the establishment of special rupee Vostro accounts is a significant step towards this goal. The use of local currencies in cross-border trade is gaining momentum, and India’s efforts could have significant implications for the global economy.