India Rupee to be used for International Trade in Russia and SriLanka

by Subhechcha Ganguly

Dollar-strapped and under sanctions, Sri Lanka The Indian Rupee Trade Settlement Mechanism, a game-changing effort that allows using Indian Rupees instead of Dollars and Other Major Currencies for International Transactions, will be used for the first time by Russia.

It occurs shortly after the Indian government announced it was looking into ways to include nations who are particularly short on dollars in the Indian rupee trade settlement process.

The Reserve Bank of India’s (RBI) clearance is required before the Indian rupee can be designated as Sri Lanka’s official foreign currency, according to the Central Bank of Sri Lanka (CBSL). According to reports, banks in Sri Lanka have set up special accounts for trading in INR dubbed Special Vostro rupee accounts, or SVRA.To promote the Indian Rupee as a global currency, Indian banks are also looking into the prospect of conducting business with Bangladesh and other African nations in Indian Rupee. Increased worldwide rupee trading will protect India’s exports against changes in foreign exchange rates.

As of now, 12 Vostro accounts can be opened by banks in India in order to do currency exchange business with Russia. According to a Reserve Bank of India document obtained by the Economic Times, six other accounts, including five for trade with Sri Lanka and one for commerce with Mauritius, have also been authorised. Sudan, Tajikistan, Cuba, Luxembourg, and other nations are apparently in discussions about utilising the rupee settlement method.

The Indian Finance Ministry has also requested that the Federation of Indian Export Organizations (FIEO) and the Indian Banks’ Association (IBA) launch an awareness campaign to educate key players about the trading in rupees.The new system for settling international commerce in the rupee was announced by the Reserve Bank of India in July. This was done in an effort to internationalise the Indian currency as well as devalue the rupee in relation to the dollar.

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