RBI Introduces Liberalised Norms for INR in Global Trade

The Reserve Bank of India (RBI) has introduced new regulations to promote the use of the Indian Rupee and other national currencies for cross-border transactions, amidst the domestic currency's decline. Collaborations with various central banks aim to facilitate foreign investments and streamline trade settlements.

The Reserve Bank of India (RBI) unveiled new regulations on Thursday to bolster the use of the Indian Rupee and local currencies in international trade.

This move comes after the Indian Rupee hit a record low of 86.70 per US dollar, drawing attention to the currency's volatility. The RBI has collaborated with central banks in the UAE, Indonesia, and Maldives to advance these efforts. Notably, the Special Rupee Vostro Account (SRVA) has gained traction since its introduction in July 2022, with multiple foreign banks establishing SRVAs in India.

The revamped regulations, part of a broader review of the 1999 FEMA guidelines conducted with the central government, enable non-residents to engage in legitimate transactions using INR accounts and facilitate foreign direct investment in non-debt instruments. The RBI's initiatives aim to streamline trade processes by allowing Indian exporters to manage trade settlements in foreign currencies.

(With inputs from agencies.)