Russia has become the 5th largest exporter to India. India’s import from Russia skyrocketed to $21.34 billion in the April-September period. Amid rising exports, the Reserve Bank of India has allowed the opening of nine Vostro accounts with Indian lenders. In July, the RBI unveiled a mechanism for the settlement of international trade in Indian rupee.
The move aims to promote Indian rupee in the international global community. It will help ease the flow of trade amongst nations and give the Indian economy a broader scope. RBI Deputy Governor has said that for India to be an economic superpower, internationalization of rupee is an unavoidable risk. Meanwhile, Finance Minister Nirmala Sitharaman has said that many countries have shown interest in global trade in Indian rupee.
Before delving any further, let us understand as to what are Vostro accounts? How will it help in the internationalization of rupee trade? Hamsini Karthik explains.
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