Will Rupee Replace Dollar as International Currency?

The Indian Rupee is soon to be known as the International Currency and will replace American Dollar. According to latest reports, the more nations are agreeing on not using the dollar, the more it becomes easier for Indian Rupee to become the next big thing in International Trade. The News of Opening of 60 Special Vostro Accounts in 18 countries. The list of the countries includes Russia and Shri Lanka has been authorized by India’s Central Bank, The Reserve Bank of India (RBI) to facilitate the smooth operation of International trade in INR.

Will Rupee Replace Dollar as International Currency?

The news of Indian Rupee becoming Global Currency has been circulating after the RBI had given a green flag in opening domestic and Foreign AD (Authorized Dealer) Banks in more than 60 cases for opening SRVA’s of Banks from 18 nations all over the world. According to Bhagwat Karad, Finance Minister of India “It is for the purpose of settling payments in Indian Rupees.

In the list of 18 Countries, Russia has been the most vocal in promoting local currency as their part of de-dollarization movement. The another reason of Russia’s promoting the Indian Currency is because of the Conflict Between Russia and America due to Russia-Ukraine Conflicts. India has been promoting the idea of trading in local currency instead of Dollar to increase the export rate.

List of countries allowed trading in Indian rupees

·         United Kingdom

·         Malaysia

·         Russia

·         Singapore

·         New Zealand

·         Sri Lanka

·         Myanmar

·         Botswana

·         Israel

·         Fiji

·         Oman

·         Germany

·         Kenya

·         Guyana

·         Mauritius

·         Seychelles

·         Tanzania

·         Uganda

What is Special Rupee Vostro Account (SRVA)?

The process of Special Rupee Vostro Account was initiated in July when the India’s Central Bank, RBI Published a list of Guidelines for Cross Border commercial transactions in Indian Rupees(INR). This Decision by RBI has been made to implement a new system for import and Export that will allow for INR invoicing, Payment Conducting and Settlements.

The key advantage of Opening a SRVA account by nations is that the money can be easily transferable to their regular accounts.

Authorized Banks of India needed to open and maintain SRVA;s of the banks in the partner trading country which is in order to settle trade using the new procedures. The foreign entity’s holding in the Indian bank is debited in INR through these accounts. Amounts received in rupees by an Indian importer to a foreign trader are credited to this Vostro account.

When an Indian exporter must make a rupee payment for goods or services, funds from this vostro account will be withdrawn out and deposited to the exporter's normal account in a manner similar to this. The excess cash that SRVA holders have access to may be invested in Indian government securities. The RBI is providing this chance to aid in raising awareness of the new system.

The List of banks that receive RBI permission for SRVAs

Three of Russia's leading banks, Sberbank, VTB Bank, and Gazprombank, were among the first to get RBI approval for SRVAs.

For the daily Dose of Entertainment, Knowledge and Health-Related News, Do Follow KBTHB Media- A platform dedicated for Knowledge Seekers!