The Indian government has announced that it will facilitate the settlement of international transactions using its own currency, the rupee, as part of the Foreign Trade Policy framework implemented on April 1 to facilitate payments to countries experiencing a run on the US dollar This was introduced in order to.
India to offer rupee-denominated settlement options for international commerce
The Indian government is introducing a new payment option for international commerce, apart from the U.S. dollar. Guiding the new foreign trade policyis a new option for “settlement in Indian rupees,” which was implemented on April 1, allowing countries facing a shortage of U.S. dollars to continue doing business with the country.
The new directive is directed to help countries such as Sri Lanka, Bangladesh, and Egypt, which have difficulty obtaining US dollars to continue bartering with India. Commerce Secretary Sunil Barthwal has said that the measure will help protect these countries from disaster if the dollarwere to dry up.
This move is part of New Delhi’s effort to profile its currency on a global level. In this regard, the Indian Ministry of Commerceexplainsthat the new foreign trade policy plan “aims to make the Indian rupee a global currency, giving further impetus to India’s emergence as a global trade hub.”
countries breaking away from U.S. dollar hegemony
India is one of the last of the countries moving certain initiatives to move away from the use of the US dollar, at least in international payments. China, a member of the BRICS bloc integrated with India, Brazil, Russia, and South Africa, is also pushing for the use of the Chinese yuan as part of its international de-dollarization policy.
During President Xi Jinping’s visit to Russia on March 21, President Putin endorsed the use of the renminbi for settlements with emerging economies in Asia, Africa, and Latin America. More recently, China signed an agreement with the Brazilian government to substitute its own currency instead of the dollar for bilateral settlements.
Other blocs are also looking at different ways to reduce their dependence on the US dollar. The Association of Southeast Asian Nations (ASEAN), which unites Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, is pushing member countries to use their national currencies for payments, fearing secondary U.S. sanctions for failing to enforce a trade ban against Russia.and is pushing for member countries to use their national currencies for payment.
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