New Economy Policy De-Dollarisation Bangladesh and India launched the trade transaction in rupees, a step towards de-dollarization. De-Dollarisation refers to countries reducing their reliance on the US dollar, and advancing trade and economic reserves in their own currency or alternate resources. It will strengthen regional currency and trade. Also, both countries will gradually adopt Bangladeshi currency 'Taka' for trade. Exchange rate will be fixed in line with market demand and banks involved in the process. About Internationalisation of the Rupee It is a process that involves increasing the use of the local currency in cross-border transactions. It involves enhancing the currency's acceptance, liquidity, and usability in global markets. Steps Taken to Promote International Trade Settlement in Rupees In July 2022, the RBI provided an additional arrangement for invoicing, payment, and settlement of exports/imports in the rupee. As part of this mechanism, in December 2022, India saw its first settlement of foreign trade in rupee with Russia. So far banks in 19 countries including the UK, New Zealand, Germany, Malaysia, Israel, and the UAE have been permitted to make settlements in rupees. Advantages of Internationalisation of the Rupee Mitigates currency risk for Indian businesses. Reduces the need for holding foreign exchange reserves. Reducing dependence on foreign currency.
