General

The Ministry of Finance of India and the Reserve Bank of India held a meeting on the 7th to organize relevant companies and banks to speed up the settlement of international trade in rupees.

According to Indian media reports, the Indian Ministry of Finance and the Reserve Bank of India pointed out that promoting rupee settlement in international trade can reduce transaction costs and exchange rate risks. It is reported that countries such as Sri Lanka, Argentina and Zimbabwe are currently interested in the rupee settlement mechanism.

The move by the RBI and the Indian Ministry of Finance comes against the backdrop of the RBI's dwindling foreign exchange reserves. Due to the rising US dollar index, in order to maintain the basic stability of the rupee against the US dollar, the RBI had to use its foreign exchange reserves to intervene. As a result, the RBI's foreign exchange reserves continued to decrease.

On July 11, the RBI launched the rupee settlement mechanism for international trade, with immediate effect. The RBI pointed out that the settlement of invoices, payments and settlement of imported and exported goods in rupees is to promote the growth of global international trade, increase the interest of the global international trade community in Indian rupees, and promote Indian exports. Currency exchange rates between India and trading partner countries can be determined by the market.