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Source: Overseas Network

Indian Rupee (data map)

Overseas Network, August 15th According to Reuters on the 14th, the Indian government said that the central banks of India and Russia have restarted negotiations to expand the local currency settlement mechanism to solve payment problems after the surge in bilateral trade in recent years.

The discussions between the two central banks involve setting a reference rate for trade between the two local currencies, rather than using the U.S. dollar as an intermediate currency to determine the exchange rate between the Indian and Russian currencies. "If a direct exchange rate is used for bilateral trade settlement, the two countries will not have to peg it to any currency, including the U.S. dollar. But this will require the Indian rupee and the Russian ruble to be traded in larger quantities and for longer periods of time on the same currency exchange platform," the two sides have not yet reached an agreement on this.

In recent years, Russia has become India's second largest source of imports. In the first four months of this fiscal year, Russia's exports to India increased to US$23.78 billion, a year-on-year increase of 20.3%; in fiscal year 2023, exports reached US$61.43 billion, a year-on-year increase of 33%. At the same time, India's exports to Russia are also growing. Due to payments to Indian merchants, the valuation of the Indian rupee accumulated by Russia has dropped from billions of dollars to millions of dollars. In the 2023-2024 fiscal year, India's exports to Russia increased by more than 35% year-on-year to US$4.3 billion. (Overseas Network Hou Xingchuan)

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