Internationalisation of rupee will help lower transaction costs, reduce dependence on dollar, says e
G Padmanabhan, Former Executive Director of RBI, believes that the internationalisation of the rupee will yield several benefits, including reduced cross-border transaction costs and a decrease in reliance on the US dollar. The measures implemented by the RBI and the government thus far are seen as crucial steps in paving the way for the rupee's integration into international trade transactions.
The current geopolitical climate, such as sanctions against Russian entities and the impounding of Russian dollar reserves, has sent ripples through emerging markets like India, which hold significant dollar reserves. This realisation underscores the need for diversifying currency usage to avoid vulnerabilities resulting from the weaponisation of the dollar.