India Inc.'s Young Brigade

This April, Bangladesh became the 19th country to agree to settle bilateral trade in Indian rupees. Countries wary of excessive dollar outflows, especially those who run trade deficit with India, have started signing rupee trade settlement deals

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Indian rupee is among the prominent currencies that are being referred to as the ‘R’ Club that threatens the hegemony of the dollar in international trade and settlements. These currencies — whose names co-incidentally start with an ‘R’ — envisage a multi-polar system where Indian rupee, Brazilian real, Russian rouble, Chinese renminbi, South African rand, Saudi riyal, Indonesian rupiah and Malaysian ringgit are a viable alternative to the dominance of the U.S. dollar. Their acceptance having been accelerated by the Russia-Ukraine conflict. India, for instance, has approved 60 cases for opening Special Rupee Vostro Accounts from over one-and a-half dozen nations. Even France, a NATO member, has exhorted Europe to reduce dependence on the U.S. dollar, settling its first gas trade in Chinese RMB. Is the world headed towards de-dollarisation of the financial system? On page 58, Rajiv Ranjan Singh explains how realistic is this proposition.