Rupee goes international: Journey of Indian currency since 1947
Keeping other aspects of the economy aside, let us have a glance at how the Indian rupee from being a relatively weak currency started its journey toward internationalisation. The value of a country's currency and its usage for global trade are among the key indicators for gauging its economic stride. Banks from 22 countries have opened special Rupee vostro accounts in Indian banks in order to trade in local currency as part of gradual de-dollarisation plans, the Parliament was informed during the just concluded monsoon session of Parliament.
Simply put, vostro accounts enable domestic banks to provide international banking services to clients who have global banking needs. In a written reply in Lok Sabha, Union Minister of State (External Affairs) Rajkumar Ranjan Singh listed out the names of the countries. They include Belarus, Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, Tanzania, Uganda, Bangladesh, Maldives, Kazakhstan and the United Kingdom.
The Reserve Bank of India last year put in place an arrangement, allowing transactions in domestic currencies to promote the growth of global trade with an emphasis on exports from India and to bring in increasing interest towards the rupee. The internationalisation of the rupee gathered steam following the Reserve Bank of India's (RBI) announcement of a mechanism to settle payments for international trade in rupees, especially for India's exports. The RBI allowed invoicing and payments for international trade in Indian Rupee on July 11, 2022.
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