Blitz Bureau
NEW DELHI: The Reserve Bank of India (RBI) on October 1 announced more measures to facilitate wider use of the Indian Rupee and local currencies in international trade transactions. “For months now, the Government has been taking steps to internationalize the rupee, which refers to the process of making the Indian currency widely accepted and used for global trade, finance, and investment. We have been making steady progress in this regard,” RBI Governor Sanjay Malhotra said.
As a calibrated step in this direction, it has been decided that authorized dealer banks in India and their overseas branches may be permitted to lend in INR to persons resident in Bhutan, Nepal, and Sri Lanka, including a bank in these jurisdictions, to facilitate cross border trade transactions. The amendments to regulations will be notified shortly, according to an RBI statement.
In order to promote the settlement of cross border transactions in INR and local currencies, the Reserve Bank of India has been progressively liberalising regulations under the Foreign Exchange Management Act. To take this initiative further, it is essential that INR liquidity is made available and accessible to residents of other countries, the statement explained. Another measure that has been taken in this regard is to allow additional reference rates to be published by Financial Benchmarks India Limited. Over the years, the development of Forex market has facilitated the growing integration of the Indian economy with the rest of the world in terms of trade and capital flows. At present, Financial Benchmarks India Limited (FBIL) publishes reference rates for USD, EUR, GBP and JPY against INR.
