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Mumbai, The <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword> and Bank <keyword id="19909773" type="General" weightage="20" keywordseo="indonesia" source="keywords">Indonesia</keyword> (BI) on Thursday signed a Memorandum of Understanding to promote use of local currencies for bilateral transactions. The MoU was signed here for establishing a framework to promote the use of local currencies viz., the <keyword id="20045514" type="General" weightage="20" keywordseo="indian-rupee" source="keywords">Indian Rupee</keyword> (INR) and the Indonesian Rupiah (IDR) for cross-border transactions, <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> said in a statement. This framework would enable exporters and importers to invoice and pay in their respective domestic currencies, which in turn would enable the development of an INR-IDR foreign exchange market. "Use of local currencies would optimise costs and settlement time for transactions," RBI said. The MoU was signed by RBI Governor <keyword id="19913110" type="General" weightage="20" keywordseo="shaktikanta-das" source="keywords">Shaktikanta Das</keyword> and Bank Indonesia Governor <keyword id="20862647" type="General" weightage="20" keywordseo="perry-warjiyo" source="keywords">Perry Warjiyo</keyword>. "The MoU on establishing a framework for cooperation in the area of cross-border transactions in local currencies between <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> and Indonesia, aims to promote the use of INR and IDR bilaterally," RBI said. The central bank further said the collaboration marks a key milestone in strengthening bilateral cooperation between RBI and BI. Use of local currencies in bilateral transactions will eventually contribute to promoting trade between India and Indonesia as well as deepen financial integration and strengthen the long historical, cultural and economic relations between India and Indonesia, it added.

RBI, Bank Indonesia sign pact to promote use of local currencies for bilateral trade

The Reserve Bank of <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword> (<keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword>) on Thursday allowed the opening of rupee accounts outside India as part of its strategic action plan to internationalise the domestic <keyword id="20256153" type="General" weightage="20" keywordseo="currency" source="keywords">currency</keyword>. With emphasis on continuous synchronisation of the <keyword id="19940710" type="General" weightage="20" keywordseo="FEMA" source="keywords">FEMA</keyword> operating framework with the evolving macroeconomic environment, rationalisation of various guidelines will be of primary focus, the central bank said in its annual report. The RBI said it has finalised a strategic action plan for 2024-25 and envisaged liberalisation of external commercial borrowing (ECB) framework and 'Go-live' for phase I of software platform for ECBs and trade credits reporting and approval (SPECTRA) project. The RBI will permit opening of rupee (INR) accounts outside India by persons resident outside India (PROIs) as part of the 2024-25 agenda for internationalisation of the domestic currency. "INR lending by Indian banks to PROIs and enabling foreign direct investment (FDI) and portfolio investment through special accounts [special nonresident rupee (SNRR) and special rupee vostro account (SRVA)," the report said. Rationalisation of the Liberalised Remittance Scheme (LRS) and review of the IFSC regulations under FEMA also are part of the agenda for the current financial year. The RBI report further said rationalisation of regulations towards promoting the internationalisation of the INR was undertaken to enable the settlement of bilateral trade in local currencies. Going forward, it said the liquidity operations would continue to be in sync with the stance of the monetary policy, while the foreign exchange operations would be guided by the objective of ensuring orderly movements in the exchange rate of the rupee. SEE ALSO:<a href="https://www.businessinsider.in/india/news/lok-sabha-exit-poll-2024-what-are-they-when-will-they-be-announced-and-all-you-need-to-know/articleshow/110565608.cms" target="_blank"></a> <a href="https://www.businessinsider.in/india/news/lok-sabha-exit-poll-2024-what-are-they-when-will-they-be-announced-and-all-you-need-to-know/articleshow/110565608.cms" target="_blank">Lok Sabha Exit Poll 2024 – what are they, when will they be announced and all you need to know</a><a href="https://www.businessinsider.in/tech/apps/news/truecaller-can-now-detect-if-the-caller-is-using-ai-how-to-use-it-to-prevent-ai-call-scams/articleshow/110556100.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/apps/news/truecaller-can-now-detect-if-the-caller-is-using-ai-how-to-use-it-to-prevent-ai-call-scams/articleshow/110556100.cms" target="_blank">Truecaller can now detect if the caller is using AI – How to use it to prevent AI call scams</a><a href="https://www.businessinsider.in/sports/webstories/indias-t20-world-cup-team-matches-and-everything-you-need-to-know/slidelist/110551798.cms" target="_blank"></a> <a href="https://www.businessinsider.in/sports/webstories/indias-t20-world-cup-team-matches-and-everything-you-need-to-know/slidelist/110551798.cms" target="_blank">India’s T20 World Cup team, matches and everything you need to know</a>

RBI to allow opening of rupee account outside India

<ul class="summary-list"><li>India's pushing to internationalize the Indian rupee, according to a report from its central bank.</li><li>Countries globally are lining up alternative currencies for trade amid the de-dollarization discourse. </li></ul>It's not just <a href="https://markets.businessinsider.com/news/currencies/china-de-dollarization-dollar-dominance-global-central-banks-currency-yuan-2023-5">China</a> that's trying to internationalize its national currency. India's now at it too, as the Reserve Bank of India, or RBI, indicated in a <a href="https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/RIDGINRD2D459218BDC46AB9253DE553B256AC1.PDF" target="_blank" rel="noopener">report made public on Wednesday.</a> The US dollar has been the world's <a href="https://crsreports.congress.gov/product/pdf/IF/IF11707" target="_blank" rel="noopener">reserve currency</a> since the Second World War, playing a crucial role in the world's trade and financial system.But sweeping sanctions against Russia that expelled the country from the US dollar-dominated global financial system spooked other countries so much that they are now <a href="https://www.businessinsider.com/dedollarization-usd-greenback-gold-yuan-euro-bitcoin-brics-alternate-2023-5#1-beijing-has-big-ambitions-for-the-chinese-yuan-2" target="_blank" rel="noopener">lining up backup currencies for trade.</a> "The internationalization of a currency is also closely interlinked with the nation's economic progress, especially its prominence in global trade," an RBI working group said in the report.Although RBI said the working group's recommendations do not reflect its official position, they come a year after <a href="https://www.indiatoday.in/business/story/india-goes-for-global-trade-payments-in-rupees-what-it-means-challenges-ahead-1974809-2022-07-12" target="_blank" rel="noopener">Prime Minister Narendra Modi's administration first started touting the greater use of the rupee globally.</a>In its Wednesday report, the RBI working group encouraged the opening of rupee-denominated accounts for non-residents in India and overseas. It also recommended the integration of Indian payment systems with those in other countries for cross-border transactions.While the macro geopolitical environment is spurring countries to seek alternative currencies to trade with, there's long been uneasiness over the dollar's outsized dominance in global trade and finance.In its report, the RBI highlighted the US needs to maintain its obligations and responsibility as the issuer of the reserve currency but, when forced to choose between its own interests and those of the rest of the world, the American government has in the past "not hesitated to protect its own interests."This is an issue because it contributes to an imbalance in the international monetary system, which is already skewed toward the US precisely because it is the issuer of the world's dominant reserve currency, per the report. "It, therefore, seems evident, that while the US dollar's 50-year-long dominance remains unchallenged for now, it has started to erode slowly, and the economic order will have to evolve to look beyond the US dollar in the future," the RBI working group added.Even though there's a global trend to de-dollarize, the greenback is still by still by far the world's most dominant reserve currency, accounting for almost 90% of global foreign currency transactions, according to a <a href="https://www.bis.org/statistics/rpfx22.htm" target="_blank" rel="noopener">2022 survey from the Bank of International Settlements,</a> whose members are central banks. India, for instance, has made little headway with its push to use more rupees for trade. Just 0.01% of India's trade in goods was settled in the rupee last year, <a href="https://www.bloomberg.com/news/articles/2023-07-07/modi-s-push-to-take-indian-rupee-global-gets-off-to-a-slow-start#xj4y7vzkg" target="_blank" rel="noopener">Bloomberg reported on Friday</a> citing people familiar with the matter.Even <a href="https://www.businessinsider.com/dedollarization-russia-dollar-yuan-billions-india-struggle-use-ruble-2023-6" target="_blank" rel="noopener">Russia's having problems</a> in dealing with the rupee with India, which is now one of the biggest buyers of Russian energy. This alternative currency trade has left Moscow stuck with up to $1 billion worth of rupees each month in Indian banks which it has problems repatriating, according to <a href="https://www.bloomberg.com/news/articles/2023-06-01/russia-s-rupee-trap-is-adding-to-147-billion-hoard-stuck-abroad" target="_blank" rel="noopener nofollow">Bloomberg calculations</a> in June. The RBI did not immediately respond to a request for comment from Insider.

It's not just China &mdash; India is now pushing a de-dollarization narrative by touting the use of the rupee for trade

It's not just China —India's now pushing a de-dollarization narrative by touting the use of the rupee for trade

The <keyword id="6354731" type="General" weightage="50" keywordseo="state-bank-of-india" source="Orion">State Bank of India</keyword> (<keyword id="13222" type="General" weightage="100" keywordseo="sbi" source="Orion">SBI</keyword>) on Thursday said the <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (<keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword>) should internationalise the Indian rupee. In a research report, the SBI said that the central bank should make a conscious effort to internationalise the rupee. "The Russia-Ukraine war and the disruptions to payments caused by it, is a good opportunity to insist on export settlement in rupee, beginning with some of the smaller export partners," the SBI said. The banking major also welcomed the RBI's measures relaxing the external commercial borrowing (ECB) and foreign portfolio investors (FPI) norms in the debt segment. According to the SBI, the global economy is volatile and on an average, energy, base metals, precious metals, and agricultural prices are now down 25 per cent from 52 week highs with markets anticipating a global slowdown morphing into a full-blown global recession. However, it is not clear whether such decline is the result of synchronised global rate actions or genuine fears of a recession looming large, the SBI report noted. In <keyword id="3658" type="General" weightage="50" keywordseo="india" source="Orion">India</keyword>, such global developments could have a direct bearing on the inflation trajectory in the second half of the current fiscal. "The RBI has been on course in normalising liquidity and net LAF (liquidity adjustment facility) is now close to the 1.5 per cent threshold non-inflationary level of liquidity. However, the problem is unspent Government cash balances that has now jumped to Rs 3.1 trillion," the report said. This effectively implies that core liquidity is still at Rs. 6.2 trillion as against Rs 8.3 trillion in the beginning of April. Additionally, the RBI has also announced a slew of measures to augment capital inflows by making <keyword id="11904949" type="General" weightage="50" keywordseo="nri" source="Orion">NRI</keyword> deposits more attractive. The SBI said the cumulative impact of all these measures will be beneficial for the external sector given the fact that total Non-Resident Indian (NRI) deposits exhibited an inflow of $3.2 billion in FY22 as against the inflows of $7.4 billion in FY21. On credit growth, the SBI said it expanded at Rs 2.6 lakh crores far outstripping bank deposit growth at Rs 1.04 lakh crore in the current year. The continued growth in bank credit is a matter of comfort and indicates that the Indian economy is still navigating through the turmoil rather well. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/taiwanese-crypto-exchange-suspends-trading-in-rupees-after-tds-laws-kick-in/articleshow/92727555.cms">Taiwanese crypto exchange suspends trading in Rupees after TDS laws kick in</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/indian-metal-shares-surge-as-demand-hopes-build-after-chinas-220-billion-stimulus-plan/articleshow/92726640.cms">Indian metal shares surge as demand hopes build after China’s $220 billion stimulus plan</a>

It's the right time on export settlements in Rupee, SBI tells RBI

<ul class="summary-list"><li>Russia's amassing $1 billion worth of Indian rupees each month that it's struggling to use.</li><li>India has been buying Russian oil using rupees as Moscow has been shut out of the USD-denominated global payments system.</li></ul><a href="https://markets.businessinsider.com/news/commodities/russia-oil-exports-economy-record-highs-production-output-cuts-crude-2023-5">Russia's oil trade with India is booming</a> — but Moscow doesn't know how to fully reap the benefits of that trade. Even since Russia was cut off from the US dollar-dominated global payments systems following sweeping sanctions off the Ukraine war, the two countries have used the Indian rupee for trade.However, Russia's now having issues with trading in the rupee because there's more Indian demand for Russian goods than the other way around — meaning Russia has been saddled up to $1 billion worth of rupees each month that's stuck in Indian banks, according to <a href="https://www.bloomberg.com/news/articles/2023-06-01/russia-s-rupee-trap-is-adding-to-147-billion-hoard-stuck-abroad" target="_blank" rel="noopener">Bloomberg calculations</a> on Thursday.And it's not like Russia can send the rupees back home either because India has <a href="https://www.ncaer.org/wp-content/uploads/2022/09/j4.pdf" target="_blank" rel="noopener">restrictions over capital flows</a> by foreign investors — the country is looking at $2 to $3 billion worth of rupees stuck in India every quarter.That adds up to $147 billion in Russia's net foreign assets built up over 2022, per Bloomberg estimates based on Bank of Russia data. To contextualize how big of a sum that is for Russia, the country spent 5.51 trillion rubles, or $68 billion, on defense in 2022, <a href="https://www.reuters.com/world/europe/russias-defence-spending-jumped-282-yy-26-bln-jan-feb-budget-data-2023-05-15/" target="_blank" rel="noopener">per a May 15 Reuters report that cites data from the country's Federal Treasury</a>.<a href="https://markets.businessinsider.com/news/currencies/russia-india-ruble-rupee-sanctions-trade-imbalance-yuan-weapons-deficit-2023-5" target="_blank" rel="noopener">Russian Foreign Minister Sergei Lavrov</a> flagged the issues with the rupee earlier this month — <a href="https://www.bloomberg.com/news/articles/2023-05-05/russia-says-it-has-billions-of-indian-rupees-that-it-can-t-use" target="_blank" rel="noopener">he told reporters in India on May 5</a> there was a problem with "billions of rupees accumulated in accounts at Indian banks, and we need to use this money.""For this, rupees should be converted into other currencies. This is being discussed," Lavrov said, per Bloomberg.India and Russia are now trying to work out how Russia can use its mounting rupee stash. Options include getting Russian entities to invest in India's capital markets, Bloomberg reported, citing officials in India familiar with details.Another option under discussion is having Russia channel the rupees into Indian infrastructure projects in exchange for equity stakes, per the media outlet.But in these talks, Moscow doesn't really have much bargaining power."There are no alternative oil importers of India's caliber on the horizon for Russia, so exporters and banks will gradually accept settlement in rupees," said Alexander Isakov, Russia economist at Bloomberg Economics.And while India may have boosted its Russian oil purchases by taking advantage of <a href="https://www.businessinsider.com/russia-ukraine-war-energy-revenues-admit-problems-discounts-sanctions-2023-5">steep discounts</a> amid Western sanctions and boycotts, these buyers also have other options for obtaining their energy requirements, wrote Ian Hall, a professor of international relations, on the <a href="https://www.internationalaffairs.org.au/australianoutlook/trade-talks-mask-growing-tensions-between-india-and-russia/" target="_blank" rel="noopener">Australian Institute of International Affairs website</a> on May 2. "It is unlikely, however, that India will remain so dependent on Russian supplies in the medium to long term, given the relative proximity of the Middle Eastern producers on which it has traditionally relied," wrote Hall, who is also acting director of the Griffith Asia Institute at Griffith University in Australia.The Kremlin, Russian central bank, and India's External Affairs ministry did not immediately respond to Insider's requests for comment.

Russia doesn't know what to do with the $1 billion in rupees it is amassing in India each month

As cryptocurrencies get hammered in the economic meltdown, stablecoins -- whose value is pegged to another asset like a fiat currency or a commodity -- are also bad investments and are ill-suited as a form of money, <keyword id="74573" type="General" weightage="80" keywordseo="siddharth-tiwari" source="Orion">Siddharth Tiwari</keyword>, the Asia-Pacific head of the <keyword id="251557" type="General" weightage="80" keywordseo="bank-of-international-settlements" source="Orion">Bank of International Settlements</keyword> (<keyword id="6367870" type="General" weightage="80" keywordseo="bis" source="Orion">BIS</keyword>), has said. In <keyword id="14302068" type="General" weightage="50" keywordseo="a-south-china-morning-post" source="Orion">a South China Morning Post</keyword> report, <keyword id="6364858" type="General" weightage="80" keywordseo="tiwari" source="Orion">Tiwari</keyword> said that stablecoin name does not suggest that these are "stable" investments. "Recent events show that stablecoin fails to achieve the full network effect we would normally expect of money. But the innovation that they bring is important for us, and could be useful for the design of central bank digital currencies," he was quoted as saying in the report. Stablecoins differ from cryptocurrencies such as Bitcoin and ethereum. Last month, the shocking implosion of the TerraUSD and Luna cryptocurrencies threw many young investors into a panic, some of them saying their entire assets were blown up or even leaving suicidal messages. In a crash, the once bullish TerraUSD and sister coin Luna had lost almost all their value, sending shock waves across the world. Similar accounts of massive investment losses were shared on online communities the world over, with some investors even leaving messages hinting at plans of suicide. TerraUSD and its digital coin counterpart, Luna traded in the 10 cent-range and nearly at zero, respectively, registering more than 99.99 percent falls from their highs and wiping out nearly $38 billion of investors' money, according to data by CoinMarketCap. ALSO SEE: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/payments-council-of-india-approaches-government-over-central-banks-directive-on-credit-lines/articleshow/92484051.cms" style="">Payments Council of India approaches government over central bank’s directive on credit lines</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rupee-gains-6-paise-against-the-dollar-on-heavy-buying-in-equities/articleshow/92483628.cms" style="">Rupee gains 6 paise against the dollar on heavy buying in equities</a>

'Stablecoins are not stable and have no role as money'

New Delhi, May 8 () Two exchanges at International Financial Services Centre in Gift City, India INX and NSE IFSC, on Friday launched trading in rupee-USD derivative contracts to enable participants to hedge, trade and settle in the dollar.With the launch, trades that have been migrated to other international financial centres will now bring rupee trading home.Besides, trading of INR-USD futures and options will enable participants to hedge, trade and settle in USD with market rules and ecosystem at GIFT City IFSC that is at par with other global markets.The launch was done virtually by Finance Minister Nirmala Sitharaman, where she rang the bell electronically and declared Rupee-Dollar Futures and Options contract open for trading on India INX and NSE IFSC, both exchanges said in separate statements."We welcome today's launch of rupee-dollar trading from the International Exchanges at GIFT IFSC. This new reform will enable India to become a net exporter of financial services, being in sync with the vision of GIFT City as a platform for onshoring financial services business, presently being lost to other financial centres across the world," said Tapan Ray, MD and Group CEO at GIFT City.India INX Chairman Ashishkumar Chauhan said the launch of INR-USD contracts is a great initiative to onshore the offshore rupee-dollar markets."Introduction of rupee derivatives in IFSC is crucial for the development of Indian financial markets. Rupee derivatives in IFSC would help in creating a vibrant forex market in India. "This will also play an important role to bring offshore rupee market back to India and strengthen price discovery in Indian markets," NSE MD and CEO Vikram Limaye said.The move comes after Sitharaman in her budget speech said that in recent years, there has been a surge in trading volumes of the Indian rupee in the offshore financial centres."The government and the RBI have taken various measures to permit rupee derivatives to be traded in the International Financial Services Centre at GIFT city, Gujarat," she had added.IFSC platform offers access for the international investors and non-resident participants who currently participate in INR trading in various offshore markets and shall offer such participants, an additional trading venue at par with the other offshore market platforms. Long trading hours and USD settlement at IFSC would also help to improve access for overseas participants. This will, in turn, help these participants in hedging their rupee exposures effectively at IFSC.NSE IFSC Clearing Corporation (NICCL) would provide counter-party settlement guarantee for the trades executed on NSE IFSC Ltd.The major participants in rupee derivatives contracts at NSE IFSC would include Foreign Portfolio Investors (FPI), Corporations, IFSC Banking Units (IBUs) trading members, Global banks &amp; custodian and Non-Resident Indians.India INX and NSE IFSC are based in IFSC at Gujarat International Finance Tec-City. SP MR

India INX, NSE IFSC launch rupee-USD derivative trading

New Delhi, Feb 3 () Markets regulator Sebi on Monday fixed position limit for market participants trading on exchanges at international financial services centres (IFSCs) for currency futures and options contracts involving the Indian rupee.
 This comes after the Reserve Bank of India (RBI) in October allowed rupee derivatives with settlement in foreign currency to be traded at IFSCs, a move aimed at deepening the local bourses by bringing rupee trading home.
 For trading members, foreign as well as institutional investors, Sebi in a circular said gross open position across all contracts should not exceed 15 per cent of the total open interest or USD 1 billion equivalent, whichever is higher.
 The limit is also applicable for trading members' positions on a proprietary basis as well as clients' position.
 For other clients, the regulator said gross open position across all contracts will be 6 per cent of the total open interest or USD 100 million equivalent, whichever is higher.
 "Stock exchanges shall impose appropriate penalties for violation of position limits by eligible market participants," the Securities and Exchange Board of India (Sebi) said.
 V Balasubramaniam, MD and CEO at India International Exchange (INX), said the move is a significant boost for IFSC and will offer an opportunity to decelerate rupee trading abroad with price discovery through exchanges at IFSCs.
 According to Sebi, the institutional investors include international banking units, insurance companies, asset management companies and other funds set up in IFSC, foreign banks set up in other offshore jurisdictions, foreign portfolio investors, supranational, multilateral and statutory institutions. SRS SP HRS

You Searched For "rupee trade settlement" and got 9 results

RBI, Bank Indonesia sign pact to promote use of local currencies for bilateral trade

PTI

RBI to allow opening of rupee account outside India

PTI

It's not just China India is now pushing a de-dollarization narrative by touting the use of the rupee for trade

Huileng Tan

It's not just China —India's now pushing a de-dollarization narrative by touting the use of the rupee for trade

Huileng Tan

It's the right time on export settlements in Rupee, SBI tells RBI

IANS

Russia doesn't know what to do with the $1 billion in rupees it is amassing in India each month

Huileng Tan

'Stablecoins are not stable and have no role as money'

IANS

India INX, NSE IFSC launch rupee-USD derivative trading

PTI

Sebi sets position limit for rupee derivatives trade at IFSC

PTI

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