INDIAN CURRENCY FOR FUTURE FOREIGN TRADE

Mainly USA Dollar is used in world trade. But India is currently moving towards trading in Indian currency. At present 18 countries of the world have recognized Indian currency for trade. Russia and Moscow are the first foreign countries to step on this matter, and the others countries are Malaysia, United Kingdom, Singapore, New Zealand, Sri Lanka, Myanmar, Botswana, Israel, Fiji, Germany, Guyana, Kenya, Mauritius, Oman, Seychelles, Tanzania, Uganda. India's neighbour countries like Bangladesh and Nepal also have a shortage of dollars for trading. According to a report in the news agency in ROITERS: Tajikistan, Cuba, Luxembourg City, Sudan now are discussing with India about using this currency system. These four countries have shown interest in opening special currency accounts called Vostro Accounts. RBI has already approved Mauritius and Sri Lanka to open Vostro account.
Impact of India Currently, the world’s largest reserve currency is the US dollar. So, most of the transaction in the world trade are done by dollars. In case of an Indian seller dealing with a seller in a European country, the Indian seller must first convert the rupees into US dollars for payment. Then the seller will convert the dollar back to Euro after receiving it. Consequently, both parties have to bear the costs of this transformation. For the past few months, the dollar shortage has had an impact on various countries. This has created the need for an alternative monetary system which the Indian currency is looking to take. In order to use US dollars for most imports or exports, India has to sell Indian currency and buy US dollars. But since the Indian currency is not fully convertible, its buyers are not always available. There will be no difficulty in finding buyers for Indian currency when trading in Indian currency starts.

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