Paper Number :WP22/2022
Publication Date :July 26, 2022
To promote global trade in an inexact settlement mechanism experienced by Russia, RBI has allowed the invoicing and settlement of exports/imports in rupee. In the backdrop of the US sanction on the Central Bank of Russia, the move towards INR settlement is not only a timely move to protect the trade transactions with Russia, it is surely a way to explore the market sentiment. The internationalization of a currency requires more trade transactions denominated in that currency. So, with the war and the pandemic-driven fragility in supply chains, the U.S. and its allies’ shift towards friend-shoring global trade, move toward INR settlement may have a manifold effects to determine the future settlement of trades among BRICS and other Asian countries.