The Reserve Bank of India (RBI) has come out with a set of guidelines for settling global trade transactions in rupees. This move is aimed at promoting the use of the Indian rupee for international trade and reducing the dependency on other currencies.
Under the new guidelines, banks will be allowed to offer rupee-denominated instruments for trade financing and risk management. They will also be able to participate in global rupee settlements. The RBI has said that the move will help reduce the cost of trade for Indian companies and promote the use of the rupee as an international currency. It will also help in managing the country’s balance of payments and exchange rate risks.
The guidelines are a part of the RBI’s efforts to deepen the market for the rupee and make it more accessible to global investors. The central bank has been taking a number of steps to promote the use of the rupee in international trade and finance. The RBI had earlier allowed banks to offer rupee-denominated bonds to overseas investors and had also allowed them to participate in global rupee settlements. The rupee surplus balance held may be used for permissible current account transactions and capital in accordance with mutual agreement as per the RBI Guidelines.
The new guidelines are a further step in this direction and will help make the rupee a more internationally traded currency. Do let us know your thoughts about this new RBI guideline.
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