In a major move towards de-dollarization of international trade, India and Malaysia have agreed to settle their bilateral trade in Indian rupees. The initiative was announced by the Reserve Bank of India (RBI) with an aim to promote global trading in Indian rupees and support global trading interests. This move is seen as an attempt to counter the mounting international pressure faced by Russia due to President Vladimir Putin’s military engagement in Ukraine, which has resulted in sanctions from western countries.
Under this agreement, traders from both countries will be able to invoice their trades using Indian rupees, allowing for better pricing for goods and services traded between them. In addition, this arrangement will also help them save on currency conversion spreads. Currently, eighteen countries have been granted permission by RBI to open special ‘rupee Vostro’ accounts and use Indian rupees for settling payments, with Malaysia being one among them.
This agreement is expected to be a significant step forward in a world where several countries are trying to reduce their dependence on the US dollar and adopt more secure alternatives. India and Malaysia seem determined to lead this transition in the international market.
