The State Bank of India’s Ecowrap report had also recommended a conscious effort to ‘internationalise’ the rupee given the capital outflows from emerging market economies, including India, and currency depreciation.

It involves promoting the rupee for import and export trade, and then other current account transactions followed by its use in capital account transactions. ‘Internationalisation’ implies that the rupee can be freely transacted by both resident and non-residents, and can be used as a reserve currency for global trade. In December 2022, India saw its first settlement of foreign trade in rupee with Russia – as part of the ‘International Settlement of Trade in Indian Rupee’ mechanism initiated by the Reserve Bank of India (RBI) in July last year.Īmid talks towards finalising a free trade agreement with India, Bangladesh is also considering the settlement of bilateral trade in Indian rupees.Īlmost a year ago, the RBI’s report on currency and finance had said that the ‘internationalisation’ of the rupee is “inevitable.”

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