De-dollarisation is not our objective, says RBI Governor Shaktikanta Das
Mumbai, Dec. 6, 2024
He also mentioned that the idea of a currency for BRICS countries was floated by one of the countries; however, no decision has been made on the matter
The Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that de-dollarisation is not the objective of the central bank, and it is only a part of de-risking Indian trade, as dependence on a single currency can be problematic due to fluctuations.
Responding to a query regarding the 100 per cent tariff threat by US President-elect Donald Trump on BRICS countries, Das said, “With regard to de-dollarization, etc., so far as India is concerned, there is no step that we have taken which specifically wants to de-dollarize. All that we have done is permit the opening of Vostro accounts, and we have entered into agreements with a couple of countries by now to conduct local currency-denominated trade. That is basically to de-risk our Indian trade. Dependence on one currency can be problematic at times because of appreciation or depreciation,” Das said during the post-MPC press meet.
He also mentioned that the idea of a currency for BRICS countries was floated by one of the countries; however, no decision has been made on the matter. He added, “The geographical spread of the countries also has to be kept in mind. Unlike the Eurozone, which has a single currency and geographical contiguity, BRICS countries are spread all over; that also has to be kept in mind.”
BRICS, a group of major developing economies, includes Brazil, Russia, India, China, and South Africa, and is considered an alternative to the G7 group of developed nations. Last year, the BRICS group announced an expansion that resulted in the addition of four new members: Egypt, Ethiopia, Iran, and the United Arab Emirates.
Recently, Brazilian President Luiz Inácio Lula da Silva called on BRICS nations to create an alternative currency to replace the dollar in global trade. In response to the idea of a BRICS currency, Trump warned that he would impose a 100 per cent tariff on all imports from BRICS members if they followed through with a plan to establish such a common trade currency.
[The Business Standard]
