Rupee Ready To Go Global
The world is looking to engage in trade beyond the US dollar. India itself is in talks to enter into agreements with countries regarding trade in Indian Rupee. This development is necessary to make Rupee an international currency and achieve a 5 trillion Dollar economy.
Hemant Jain Chairman, KLJ group of companies acknowledges this fact, “emphasis in export, and global trading company in the world. It will also help check the dollar to a limited effect.” Internationalisation of Rupee is not just important for an individual trader but also the economy nationally and internationally.
It is also noteworthy that India has emerged as a resilient economy in the world. IMF has said india is the only shining star in the gloomy economic situation. India has a positive image globally, and we must exercise this reputation to emerge as a reliable trade partner in a volatile global scenario. Trading in Rupee, while a novel step, is a positive development in this regard.
However, change is always difficult. Speaking about this issue Dr. Deepak Kumar, Executive Director, RBI, “This system is not just for the trade but for all cross border transactions. Earlier when UPI was intro people were hesitant, now everyone uses it. Every month 6 Bn USD transactions happen via UPI" he says regarding the hesitation people have to a changing environment. Same path will be taken by internationalisation of INR. The Indian government realises this and RBI is now allowing and promoting trade in INR as seen in its July 2022 scheme.
There are many other benefits of the rupee as well, like mitigating currency risk, reduces currency volatility and cost of doing business. It also reduces the need for high foreign exchange reserves, while reduced dependence on convertible currency, which makes it vulnerable to external shocks. “As use of Rupee becomes significant the bargaining power of Indian business would improve, adding weight to the Indian economy, enhancing India's global stature and respect.” Adds Dr. Kumar. All these transactions will happen via NRI Vostro accounts.
Talking about international trade in Rupee Saurabh Sanyal, Deputy Secretary General, ASSOCHAM added, “We all believe international settlement of trade in Indian Rupee will help reduce India's dependence on Dollar and Euro". It is a pivotal step in ‘Atmanirbhar Bharat'.
Indian Rupee is set to hit the international market, with steps in line to achieve the same.
