Reserve Bank of India has made a good beginning in internationalisation of rupee. Explain (200 Words)
Refer - Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 2 years
KEY POINTS
· The Reserve Bank of India’s (RBI) move to permit the invoicing, payments and settlement of exports and imports in rupees is aimed at preventing dollar outflows and addressing the immediate liquidity mismatch in the local dollar market.
· RBI’s immediate objective is, of course, to enable importers to pay for expensive oil and coal in rupees, thereby preserving dollar assets.
· The mechanism, therefore, should work out, given the good political relations between the two countries.
· Bankers have also highlighted a potential problem in that the importing country’s banks may need to buy rupees from the market in the event their special Vostro accounts don’t already have a rupee balance.
· While the RBI is supporting the market, much of the dollar sales seem to be in the forward market rather than in the spot market.
· The trade facilitation measures follow the central bank’s moves last week to ease the rules to attract dollar deposits and foreign portfolio flows (FPI).
· While there could be some inflow of dollar deposits, it might not meaningfully help stem the depreciation of the rupee.
· Right now the rupee’s trajectory is being determined more by the strength of the dollar index, which hit a new high of 108. Nonetheless, it’s worth exploring ways to bring in the dollars.
Ananta Kumar Muduli 2 years
Good morning sir..
Tapasvi 2 years
Kindly review
Aravind R 2 years
Kindly review this mam/sir
