With the agreement of 18 nations to trade in the rupee, the Indian rupee is now a worldwide currency. In the midst of a worldwide economic slump, the globe is attempting to de-dollarize the international market, and India is seizing this chance. Now that payments are made in rupees, traders can import items from other nations.
18 nations, including Germany, Kenya, Sri Lanka, Singapore, the UK, and many others, are now permitted to transact with rupees thanks to RBI, the country’s national bank. These nations will invest this money in Indian businesses and purchase goods and services from India. It will increase trade and lower transaction expenses associated to it.
India is one of the most significant trading partners for many nations, and by adopting the rupee as a settlement and invoicing currency, these traders’ exposure to exchange rate risk on the global market will be reduced.
Trade in Indian rupee will have countless economic benefits
Also, it will lessen India’s trade deficit. From April 2022 to January 2023, India’s goods trade deficit—export minus import—was $233 billion. As more nations are eager to trade with rupees as a result, India will be able to export more. Trade with South Asian nations like Nepal and Bhutan will increase as a result.
Also, it will support the growth of financial markets.
After the sanctions the West put on Russia, the BRICS nations have already made an effort to dedollarize the global market. As a result, China has the chance to establish itself as a possible US rival.
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