India and UAE in talks for bilateral rupee-dirham-denominated trade

India and United Arab Emirates are in talks for bilateral trade denominated in rupee-dirham, said Sunjay SudhirIndia’s Ambassador to the United Arab Emirates, adding that both countries will benefit from it.



The ambassador said the talks started on September 1, 2022.

“Both countries find it beneficial. India has shared a concept paper with the UAE. The central banks of the two countries are discussing. The aim is to reduce the cost of the transaction,” the Indian ambassador told reporters. United Arab Emirates.

This development follows that of the Reserve Bank of India (RBI) – a payment settlement mechanism for international trade in rupees, especially for Indian exports.

It is widely believed that if the mechanism bears fruit, it could contribute greatly to the internationalization of the Indian rupee in the long run.

A currency can be called “international” if it is widely accepted around the world as a medium of exchange.

SBI Researchin a report released in early July, said an interesting development is taking place in the global currency market, as there has been a significant increase in the trading of oil and other commodities in currencies such as the renminbi, the Hong Kong dollar and the United Arab Emirates dirham. .

In the report, SBI Research said the Reserve Bank of India (RBI) should make a conscious effort to internationalize the Indian rupee amid payment disruptions caused by the ongoing war between Russia and Ukraine.

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