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RBI should internationalise Indian rupee

July 08, 2022

RBI should internationalise Indian rupee
The State Bank of India (SBI) on Thursday said the Reserve Bank of India (RBI) 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 India, such global developments could have a direct bearing on the inflation trajectory in the second half of the current fiscal.

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