RBI Promotes Use of Indian Rupee in Trade

The Reserve Bank of India (RBI) has introduced liberalised regulations to promote the use of the Indian Rupee and other local currencies for cross-border transactions, coinciding with the Rupee's recent decline to a record low of 86.70 per US dollar. The RBI has signed agreements with the central banks of the UAE, Indonesia, and Maldives to facilitate these transactions. Key changes include allowing non-residents to maintain INR accounts for various transactions and enabling Indian exporters to open foreign currency accounts overseas for trade settlements. These measures are part of a broader review of the Foreign Exchange Management Act (FEMA) regulations, aimed at enhancing the ease of doing business internationally. The RBI's initiatives are expected to streamline processes and encourage foreign investment in non-debt instruments. Overall, the RBI's actions reflect a strategic move to stabilize and promote the Indian Rupee in global trade.