The Government of Sri Lanka has also approved the Indian Rupee as an international currency. Now trade between India and Sri Lanka will be possible in Indian currency. Not only this, Indian citizens will also be able to use Indian currency for tourism purposes in Sri Lanka.
Sri Lanka is not the first country to recognize Indian currency in this manner. Even before this, many countries have given international recognition to the Indian rupee. It is clear from this that the dominance of the Indian rupee has started increasing in the world. It would not be wrong to say that now the Indian currency is preparing to compete with the dollar and the pound.
Let us know how the Indian currency is getting fame all over the world. How many countries have allowed trading in Indian currency so far? In how many countries Vostro accounts have started opening? What will be the benefit of this to the common people?
First, know why India is promoting Indian currency.
Right now the US dollar is the most powerful currency in the world. Its share in total global trade is close to 80 percent. This means that more than 80 percent of the transactions in the world's business are done in dollars only. Many countries around the world, including India, depended on the dollar for foreign import-export. If they have to buy or sell something from another country, then they have to pay in dollars only. That is why it is considered the most powerful currency in the world. Now it has started changing. Many countries have allowed transactions in Indian currency. This will reduce the dependence on the dollar and strengthen the rupee in the international market. Most of the countries interested in doing rupee trade with India are facing dollar shortages in their foreign exchange reserves.
How many countries have allowed transactions in Indian currency so far?
According to the Reserve Bank of India (RBI), 64 countries around the world are in talks with India to trade in rupees. This includes big countries like Germany and Israel. For the first time, Germany, a country included in the European Union, has come forward to do business with any currency of Asia i.e. Indian currency Rupee.
If India's business with 30 countries starts in the rupee, then the rupee will become an international currency. Along with Russia and Sri Lanka, four other African countries have approved this. Apart from this, there are 17 countries where India has opened Vostro accounts. This is mandatory for doing business in rupees with other countries. In these 17 countries, 12 Indian banks have been approved. The list includes State Bank of India, Canara Bank, Union Bank of India, UCO Bank, HDFC Bank, IndusInd Bank, Yes Bank, and IDBI Bank. After this, if an Indian buyer wants to transact with a foreign merchant in Rupees, the entire amount will be deposited in the Vostro account. When the Indian exporter is required to make payment for the goods supplied, this Vostro account will be deducted and the money will be credited to the exporter's account.
What will be the benefit to India and the Indian people?
Economic expert Prof. Prahlad says, 'Till now dollars had to be spent during trade with other countries. Due to this, there is also a shortage of dollars in foreign exchange reserves. Due to this, there is a decline in the economic growth rate of the country, and the debt also increases. But transactions in rupees from other countries will pose less threat to Indian business. Whatever product, including crude oil, is imported from other countries, it will be paid through rupees. This would save billions of dollars every year. Will get protection from currency volatility. This will reduce the cost of doing business and develop business in a better way. Not only this, but the need to keep foreign exchange reserves including dollars will also reduce. Due to a reduction in dependence on foreign currency especially the dollar, India will be less affected by external influences.
He further said, 'With the increase in trade in the rupee, the Reserve Bank of India (RBI) will not need to find buyers for the Indian currency. This will increase the demand for the Indian rupee. The amount deposited by not sending conversion fees to foreign banks will be useful within the country.
Pro. According to Prahlad, the common man will also get many benefits from the use of the rupee in international trade. The biggest benefit of this will be inflation. Many products can be cheap. Many things including edible oil, dry fruits, gas, coal, and medicines are traded between India and other countries. There will be no risk of exchange rate due to trading in rupees and businessmen can finalize deals cheaply by doing better bargaining. With this, those goods will reach the common man cheaply.
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