In addition to the present modalities of settlement in other currencies, trade between India and Malaysia can now be settled in Indian Rupees (INR).
This follows the Central Bank of India’s decision in July 2022 to enable overseas transactions to be settled in Indian rupees (INR). This RBI programme intends to assist global trade growth and to support the global trading community’s interest in the Indian rupee (INR). Significantly, India, among other countries, buys a significant amount of palm oil and derivatives from Malaysia to meet its massive domestic edible oil demand.
“India International Bank of Malaysia (IIBM), based in Kuala Lumpur, has operationalised this mechanism by opening a Special Rupee Vostro Account through its Corresponding Bank in India i.e. Union Bank of India,” an official statement said by the Ministry of External Affairs said on Saturday.
More details about the trade settlement can be accessed on its website (www.Indiainternationalbank.com.my).
Meanwhile, India on Friday unveiled India’s new Foreign Trade Policy (FTP) 2023, which seeks to boost the country’s exports to USD 2 trillion by the year 2030 and especially focuses on international trade settlement in rupees.
The government has been attempting to make the Indian Rupee a worldwide currency and to facilitate international commerce settlement. In the long run, this method will aid in the internationalisation of the Indian rupee.
A currency is considered “international” if it is generally accepted as a means of trade over the world.
So far, India has been able to conduct rupee-denominated trade with a few nations and is working closely with several others to expand it.
