Mumbai (Maharashtra): Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that India has not taken any specific steps to move away from dollars, in what is often called de-dollarisation.
Responding to questions during the post-monetary policy press conference, the central bank governor said all that RBI has done is permit the opening of Vostro accounts to countries who wish to trade in local currency. This was a part of the de-risking of trade.
"So far as India is concerned, there is no step which we have taken, specifically wants to de-dollarise. All that we have done is that we have permitted the opening of Vostro accounts and we have entered into agreements with two countries by now to do local-currency-denominated trade. That is basically to de-risk Indian trade, dependence on one currency can be problematic at times due to appreciation or depreciation," Das said.
Vostro bank accounts typically enable domestic banks to provide international banking services to clients who have global banking needs.
"De-dollarisation is certainly not our objective. It's not on the table, I think it's more of a narrative in some sections of the media. Our effect is basically to de-risk our trade. No one is talking about or thinking about de-dollarisation," he said.
Further, Das said that one of the BRICS member countries pitched a separate currency for BRICS, but no decision was taken. "The geographical spread of the BRICS countries is also a factor that has to be kept in mind, unlike the Eurozone which has a single currency as they have geographical contiguity. BRICS countries are spread all over, that also has to be kept in mind," he argued.
The commentary from the RBI governor comes at a time when US President-elect Donald Trump through an X post recently threatened BRICS countries that his administration would impose 100 per cent tariffs on all imports from those countries, should they dare to launch their currency.
The internationalisation of the rupee gathered steam following the RBI's 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.
Experts widely believe if the mechanism fructifies then it may go a long way in internationalizing the Indian currency rupee in the long run.
The value of a country's currency and its usage for global trade are among the key indicators for gauging its economic stride. The government informed the Parliament last year that banks from over 20 countries have opened special Rupee vostro accounts in Indian banks to trade in local currency. (ANI)