Trade In Indian Rupee: Delhi holding talks with its neighbours

Reserve Bank of India's Governor Shaktikanta Das yesterday said the Indian government and the central bank are in talks with South Asian countries to have cross-border trade in Indian Rupee.

In his keynote address at an IMF conference in New Delhi, he said that with global trade outlook for 2022-23 overcast, greater trade among South Asian countries can enhance opportunities for growth and employment.

"At the central bank level, a key dimension for cooperation has been learning from each other on common goals and challenges... Rupee settlement of cross-border trade and Central Bank Digital Currency, where the RBI has already started moving forward, can also be areas of greater cooperation in future," Das said.

The governor outlined six policy priorities for the South Asian region to deal with critical challenges arising from Covid, inflation, financial market tightening and the Russia-Ukraine war.

"Multiple external shocks... have exerted price pressures on South Asian economies. For successful disinflation, credible monetary policy action, targeted supply-side interventions, fiscal trade policy and administrative measures have become key instruments."

While the recent softening of commodity prices and supply-side bottlenecks should help in lowering inflation going ahead but risks to growth and investment outlook may rise if inflation persists at high levels, he noted.

Prioritising price stability may be the optimal choice for the South Asian region, Das added.