The Reserve Bank of India (RBI) in July this year introduced guidelines to promote the settlement of international trade in rupee

New Delhi: Russia has become the first country to begin settlement of foreign trade in rupee, giving up dollar and euro all together. Recently, a few transactions in the Indian currency involving Russian firms have taken place.

The Reserve Bank of India (RBI) in July this year introduced guidelines to promote the settlement of international trade in rupee.

Financial Express in a report quoted trade sources saying more transactions in rupee are likely to take place in coming months as a sanction-hit Russia has opened a dozen-and-a-half vostro accounts to facilitate trade.

Not just Russia, Sri Lanka and Mauritius have opened vostro accounts to facilitate the rupee trade.

Facilitating the rupee trade is expected to spur exports to Russia, which dropped by 16 per cent till October this fiscal from a year ago to $1.6 billion majorly due to the delayed receipt of payments.

Countries interested in rupee trade mechanism

There are about 30-35 countries, including those from Asia, Scandinavia and Africa who have expressed interest in better understanding the rupee trade mechanism for possible adoption.

India’s neighbours – Sri Lanka, Bangladesh, Myanmar, Nepal – which have been facing shortage of dollar reserves have also shown interest in trade settlements in rupee.

Source : Firstpost