RBI single announcement..! Savings of $36 billion..!?

The indian rupee fell to 79.61 against the US dollar in early morning trade on wednesday amid fears that it could touch 80 in the next few days. As the US releases its inflation data today, there is ample room for the US Federal Reserve to raise interest rates soon to curb inflation. If the US interest rate is raised, there is a high chance of exiting the investments in the indian market, thus the question has also arisen whether the rupee, which is close to 80, will touch 81. In this difficult situation, an important scheme announced by the RBI is a huge opportunity for india to save about 36 billion dollars or 2.86 lakh crore rupees.
As all the goods imported and exported in india are done in dollars, the demand for the dollar has increased and the price of goods in india will increase accordingly. While America has been keeping its monetary policy with excessive relaxation for a long time and encouraging trade in dollars, now due to the increase in inflation, the benchmark interest rate has increased rapidly and the dollar has become dominant.To deal with this situation and because there are many countries like russia and iran that accept payment in rupees, RBI has created a new framework in india to import goods from abroad in rupees and export goods from india to foreign countries in rupees.The reserve bank of india introduced the Rupee Settlement System for international Trade to promote the growth of global trade with an emphasis on the country's export trade and to support trade in the indian currency. With this new trade system, india will be able to start trading with russia immediately in rupee terms.With this new special Vostro account structure, india can pay for all its purchases from russia, especially crude oil, gold, military weapons, etc., in indian rupees instead of paying in foreign currencies like dollars and euros. Russia, iran, and sri lanka can now be traded through the rupee, with the United Arab Emirates, Saudi Arabia, and china likely to join the list in the next few months. In this situation, if the trade between india and russia averages $3 billion per month, it is about $36 billion per year.India will be able to save this USD 36 billion dollar reserve, while the rupee will start appreciating with foreign investments pouring into the indian market, which will in any case give india a huge profit. This scheme announced by RBI is a jackpot for india while India's export business is growing rapidly.
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RBI single announcement

Sowmiya Sriram

13/07/2022 03:46 PM