The RBI sets up a system to regulate trading in rupees

‘The move may help trade with countries under international sanctions’; ‘could add strength to the rupee in forex trading’

‘The move may help trade with countries under international sanctions’; ‘could add strength to the rupee in forex trading’

The Reserve Bank of India (RBI) has launched a move to restructure the global exchange rate in rupees (INR), with immediate effect. However, banks that act as authorized customers for such merchants must obtain prior approval from the regulator to process this.

“In order to stimulate the growth of the global trade with a strong focus on exports from India and to support the strong demand of the global trading community in INR, it has been decided to put in place a new structure. for invoicing, payment, and processing of shipments / importers. in INR, “the RBI said in a letter.

“Before embarking on this type of operation, banks will be required to first obtain approval from the Foreign Exchange Department of the Reserve Bank of India, Central Office in Mumbai,” he said.

“The RBI’s move to set up the International Trade Settlement process in INR is to facilitate trade with sanctioned countries such as Iran and Russia,” said EEPC India chief Mahesh Desai. “Since the sanctions were imposed in Russia, trade with the country has been in turmoil due to payment problems. Due to the trade negotiation process introduced by the RBI, we are aware of payment problems with Russia. be simple. The move to reduce the impact of forex fluctuation pays special attention to the Euro-Rupee parity. We see this as a first step towards 100% convertibility of Rupee, “he said.

Buyers and importers under this arrangement can be denominated and denominated in rupee (INR) and the price can be decided between the currencies of the two trading partners, he said. and RBI in the announcement.

It is said that AD deposits in India have been allowed to open Rupee Vostro deposits.

Importers from India who take the import through this method have to pay the INR to be loaned into the Vostro Special account of the partner country’s golf course, against invoices for providing products and services from external customers.

Customers in India using the machine will be paid to earn money in INR from the balances in a specially selected Vostro account of the partner country’s golf portfolio.

Welcome to the new Provision, FIEO President A. Sakthivel moving at a time, at a time when many countries are facing ‘huge forex shortages in Africa and South America’, allowing jobs exim through LC to help our customers and importers. “This move is to see the Indian rupee as a world currency. We hope the Government will explain the benefits to investors in those things that are taken in Rupee, which is now given for foreign currency investment, “said Mr. Sakthivel.

Observers also pointed to the move to add strength to the rupee in the forex market. “Amid the ongoing weakness of the rupee, the RBI today announced measures intended to reduce demand for foreign exchange, by announcing a rupee correction of commercial flows, ”said Rahul Bajoria, MD and Chief India Economist, Barclays. “Despite the current expansion, we see these processes as long -term initiatives that will allow INR to be better used by other currencies,” he said.

According to the announcement, Indian consumers will be able to get the first payment against imports of Indian rupees from foreign importers through the Rupee Payment Mechanism. Before accepting the receipt of the first payment against customers, Indian banks must ensure that the funds raised in these accounts are first used for future payment claims. in discount / discount orders in the pipeline, RBI said.

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