BackFinMin to discuss ways to promote cross-border trade in rupee tomorrow
Financial services secretary Sanjay Malhotra will be chairing the meeting and is also likely to see attendance from representatives of the Reserve Bank of India, IBA and industry bodies.
PremiumThe Finance Ministry is set to meet on Wednesday to discuss ways to promote cross-border trade in the rupee instead of the US dollar. The meeting will be attended by stakeholders, including banks and officials of external affairs and commerce ministries. Financial services secretary Sanjay Malhotra will be chairing the meeting and is also likely to see attendance from representatives of the Reserve Bank of India, IBA and industry bodies.
Sources told PTI that banks would be asked to promote this by asking exporters to negotiate on rupee trade.
In July, RBI released a detailed circular on cross-border trade transactions.
RBI decided to put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in INR.
In its circular, RBI had said that "Indian importers undertaking imports through this mechanism shall make payment in INR which shall be credited into the Special Vostro account of the correspondent bank of the partner country, against the invoices for the supply of goods or services from the overseas seller /supplier."
On exports, the central bank stated that Indian exporters, undertaking exports of goods and services through this mechanism, shall be paid the export proceeds in INR from the balances in the designated Special Vostro account of the correspondent bank of the partner country.
The move is to promote the growth of global trade with emphasis on exports from India and to support the increasing interest of the global trading community in INR.
At present, a huge part of bilateral trade between India and Russia is being settled in the rupee due to sanctions imposed by major westerners the US and Europe after Kremlin's attack on Ukraine.
On Monday, in an annual event at FIMMDA, Mumbai, RBI governor Shaktikanta Das said, "the Indian rupee has moved in an orderly manner in the current financial year so far. It has held its own in a world of sharp depreciation across other EME and AE currencies. While the US dollar has appreciated by 11.8% during the current financial year so far, the INR has depreciated by 5.1%, which is among the lowest in the world."
Das said, "The RBI is in the market on a regular basis, providing liquidity and confidence so as to facilitate its smooth and normal functioning."
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