India has once again distanced itself from the rising de-dollarization accusations. The latest update follows how India has actively denied its involvement in exploring US dollar alternatives, stressing the dollar’s evergreen role as the reserve currency, with no plans of ever replacing the asset with other notable competitors.
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India Backs Dollar in a New Update
India has once again reiterated its former stance, adding that the nation is not intersecting with any other currency besides the USD. In a recent interview, Chief Economic Advisor of India V. Anantha Nageshwaran shared how India is not a part of any such narrative that promotes the usage of alternative currencies besides the US dollar.
“No, certainly not. I think India is not part of any such initiative,” he said in response to a question if India is looking at an alternative currency to the US dollar for global trade. As shared by the New Indian Express
Contrary to the statement above, India, in an earlier BRICS summit, had shared its desire to explore local currency narratives.
“We recognize the widespread benefits of faster, low-cost, more efficient, transparent, safe, and inclusive cross-border payment instruments built upon the principle of minimizing trade barriers and non-discriminatory access… We welcome the use of local currencies in financial transactions between BRICS countries and their trading partners.” The declaration of the 16th BRICS Summit held in October 2024 had said.
Nageswaran later emphasized how exploring alternatives to the USD is not a priority for India. He later stated how it might take significant time to find a robust USD alternative.
India Continues to Diversify Its Portfolio
Nageswaran was quick to add that diversification is one of the leading processes that India is currently focusing on. As the economy evolves to adapt to newer phases, India is diversifying its holdings, exploring alternatives like gold, to keep its economic growth stable and intact.
“So, there is a constant attention being paid to the composition of the foreign exchange reserves, including gold,” he added.
Gold is also rising steadily in demand in Indian markets. With the festive season coming up, the Indian jewelry market may witness a sharp gold purchase spike, impacting the global gold momentum.
“Signs of demand revival are emerging as the gold jewelry market gears up for the upcoming festive and wedding season (from early August to year-end). Anecdotal reports from industry stakeholders suggest a positive outlook. This optimism was evident at the recent India International Jewellery Show (IIJS), the country’s largest jewellery trade fair. As per anecdotal reports from the event, many manufacturers reported stronger-than-expected buying interest and a noticeable pickup in orders from both large chain stores and independent retailers. Retailers who had been cautious about their inventories in recent months due to lackluster demand reported active restocking in anticipation of improved festive sales. And gold price stability also reportedly supported buyer sentiment.” as shared by the World Gold Council
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