Internationalisation of INR: RBI's Efforts to Strengthen Domestic Currency and Exports

The Reserve Bank of India (RBI) has taken significant strides this year by announcing the internationalization of the Indian rupee (INR). Internationalization implies widespread acceptance of the INR globally as a medium of exchange, allowing India to use INR for imports. This move by the RBI enables settling payments for international trade in INR, invoicing, and payments, which is part of a gradual de-dollarization plan.

- Kuntala Sarkar

In 2022, India has already utilized a substantial sum of US$40 billion to stabilize the INR. Internationalization of the INR provides India with the advantage of safeguarding its foreign reserves in US Dollars, thereby enhancing forex stability. Additionally, in a volatile market, India’s imports will no longer solely depend on the US Dollar. Even if the US Dollar experiences sharp fluctuations, the import expenditure will remain more manageable. Rajkumar Ranjan Singh, Union Minister of State (External Affairs), officially stated that the government is actively engaging with the Indian trading community, including Small and Medium Enterprises (SMEs), to simplify administrative procedures and implement this mechanism effectively.

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