India is convincing developed Western countries to trade in the Indian Rupee and not the U.S. dollar. BRICS member India recently convinced the United Kingdom (UK) to settle cross-border transactions using the Rupee. The Reserve Bank of India (RBI) facilitated special Vostro bank accounts for other countries to settle imports and exports by paying with the Rupee. For the uninitiated, Vostro is a special bank account that operates domestically but clears remittances on behalf of a foreign bank that transacts in the Rupee.
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The development makes it easier for Indian businesses operating in the UK to easily transfer Rupees to vendors operating from India. Both imports and exports between vendors and businesses in the UK can seamlessly send money through the Vostro bank accounts.
Therefore, the rupee’s denomination will remain intact globally but hamper the U.S. dollar by a small margin. The facilitation of Vostro accounts went full-fledged in March this year and broadened the Rupee’s prospects overseas. The move opens up avenues to make it easier for other countries to use the Rupee for international trade.
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BRICS members Russia, India, and China are advancing at a faster pace to promote the use of their native currencies. The main goal of the bloc is to challenge the U.S. dollar’s global supremacy by strengthening their respective local currencies.
BRICS: India Convinces the UK and 21 Other Countries To Trade in the Rupee
Apart from the UK, India has convinced 21 other countries to settle trade in the Rupee and sideline the U.S. dollar. The other 21 countries are Bangladesh, Belarus, Botswana, Fiji, Germany, Guyana, Israel, Kazakhstan, Kenya, Malaysia, Maldives, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, Tanzania, and Uganda.
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The BRICS bloc is aiming to foster the use of native currencies going forward and not the U.S. dollar. The next summit in South Africa will determine the prospects of the U.S. dollar. BRICS is an acronym for Brazil, Russia, India, China, and South Africa. The upcoming summit will be held on August 22–24 in Johannesburg.