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India pins hopes on bilateral local currency trade to internationalise rupee

For the Indian economy, July 2022 was a crucial month – the rupee's exchange rate crossed the 80-per-dollar mark for the first time as the surge in global commodity prices following Russia's invasion of Ukraine in February 2022 exerted severe pressure on the Indian currency.While the Reserve Bank of India (RBI) staunchly defended the rupee – it sold foreign currency worth a record $39 billion in July 2022 and an eye-watering $213 billion on a gross basis in 2022-23 as a whole – a more long-term solution was clearly needed. And so, the central bank announced a series of measures – including the settlement of international trade in rupees – to boost sentiment and foreign inflows as well as reduce India's dollar dependence.

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