HomeAsian countries to opt for local currencies in tradeIndia, UAE, Indonesia among other Asian nations in talks to settle trade...

India, UAE, Indonesia among other Asian nations in talks to settle trade in local currencies: Report

Source : ET NOW


India, UAE, Indonesia among other Asian nations in talks to settle trade in local currencies: Report
Representative Image



New Delhi: The Reserve Bank of India (RBI) has taken a step towards internationalising the rupee—allowing the settlement of export and imports in the Indian currency, giving importers and exporters another option to settle payments, and the apex bank’s latest decision comes at a time when several Asian economies such as Indonesia, the United Arab Emirates (UAE), Sri Lanka, Myanmar, and India are in discussion with each other to settle trade in their domestic currencies.

Citing sources with knowledge of the matter, Business Standard reported talks were underway among these countries, and the central bank’s measures announced on Monday were the first step in that direction. “The next step is settling trade transactions in bilateral currencies. Both countries will accept each other’s currency. China is already trading with Russia without dollars,” the financial daily quoted the source as saying. the source added.

The RBI has introduced an additional system of payment and settlement of export and import bills in rupees, in a move to reduce reliance on US dollar transactions, primarily because of the Russia-Ukraine conflict that led to massive curbs imposed on Moscow by western countries. Several Russian banks have been removed from the Society for Worldwide Interbank Financial Telecommunications (SWIFT).

The war in Ukraine and the West’s response may have accelerated this process. However, there were already signs of the dollar losing its dominance as the global currency for trade. Last month, the International Monetary Fund’s blog said that central banks were no longer holding as many dollars in their reserves as before.

Further, the blog, citing the IMF data on the currency composition of official foreign exchange reserves, mentioned that the share of dollar in global forex reserves, which has been declining for more than two decades, fell below 59 per cent in the fourth quarter of last year.

Analysts are of the view that the RBI’s measures were aimed at easing deals with Russia, which accounts for more than 10 per cent India’s crude oil imports. Ananth Narayan, associate professor at the S P Jain Institute of Management and Research and senior India analyst at Observatory Group, told the publication: “If India does start to convert trade with Russia under this route, it can potentially pay for a chunk of its oil imports in INR… This would ease India’s hard currency outflow substantially.”Currently, one Russian ruble equals 1.35 rupees, and the rupee hit a record low for a third straight session 79.66 per dollar.

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Aatmanirbhar Bharat

All

IAF successfully conducts night vision goggles-aided landing in Eastern sector

The Indian Air Force (IAF) has achieved a significant milestone by successfully landing an aircraft using night vision goggles (NVG) for the first time...

With Project-75I Submarine Acquisition Facing Delays, MDL Shifts Focus to Indigenous 3,000-ton Project-76 Submarine Design

Source : IgMp Bureau Mazagon Dock Shipbuilders Limited (MDL), India's premier shipyard, has announced its intention to develop an entirely indigenous conventional submarine design by...

AMCA 5th Generation Stealth Fighter Updates

AMCA to be integrated with sophisticated indigenous Distributed Aperture System (DAS) that making it a formidable air asset for the Indian Air Force

Source : IgMp Bureau India’s Advanced Medium Combat Aircraft (AMCA) is on the brink of a revolutionary transformation with the integration of a sophisticated Distributed...

AMCA to incorporate the best features of both 5th and 6th Generation fighters: ADA sources

Source : IgMp Bureau India's strides toward indigenous air dominance receive a substantial boost with the green signal for the Advanced Medium Combat Aircraft (AMCA)...

Most Popular

Recent Comments

Archive Months

Miscellanous

Lithuania sees stockpile building as key deterrent

(adsbygoogle = window.adsbygoogle || ).push(); LONDON — Lithuania is determined to make stockpile building a critical component of its defense...

China’s military spending concerning given ‘failing economy’, US admiral says

The increase in China's defence spending is concerning given its economy is "failing", the head of the U.S. Indo-Pacific Command said on Tuesday. Speaking...

EAM Jaishankar to visit US from Sept 18 to 28

Source : Press Trust of India (PTI)External Affairs Minister Dr. S. Jaishankar will pay an 11-day visit to the United States beginning Sunday to...

DRDO developing Advanced Laser Threat Detection System for Armoured Fighting Vehicles for better protection

Source : Tribune IndiaImage Source : Elbit SystemsChandigarh: The Defence Research and Development Organisation (DRDO) is developing a new advanced laser threat detection system for...
Visits
error: Content is protected !!