RBI Urges Use Of Rupee As A Preferred Currency In Global Trade: FM

The Reserve Bank of India (RBI) has taken measures to promote the rupee in international trade settlement. This will help boost exports, said Finance Minister Nirmala Sitharaman.

To boost trade flow, the central bank permitted export and import settlements in rupees on July 11. Sitharaman in a written reply to Lok Sabha said, "RBI has established the arrangement for invoicing and payment of exports/imports in rupee to promote growth in global trade, with an emphasis on exports to India, and to support the growing interest of the global trading community in rupee."

She stated that the central bank had notified the arrangement in order to encourage trade growth and reduce dependence on hard currency. The emphasis was on India exports, as well as to support the growing interest of the global trading community for the rupee. had previously heard from exporters that this would encourage more trade not only with Russia but also with other countries affected by sanctions like Iran. Some said that the mechanism could be used to trade with Sri Lankan and other African countries facing foreign currency woes. They also said that it was a necessary step towards full conversion of the rupee. Special rupee Vostro accounts will be required by the concerned banks to settle trade transactions.

According to the RBI, Indian importers who are engaged in imports under this scheme shall pay rupee. This will be used against invoices from overseas sellers/suppliers.