RBI should continually work to Internationalize the Rupee: Report

In light of payment difficulties brought on by the continuing Russia-Ukraine conflict, the Reserve Bank of India (RBI) should make an attempt to internationalise the rupee, according to a research released by SBI Research on Thursday.

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In light of payment difficulties brought on by the continuing Russia-Ukraine conflict, the Reserve Bank of India (RBI) should make an attempt to internationalise the rupee, according to a research released by SBI Research on Thursday.

It is a good chance to demand rupee-based export settlement, starting with some of the smaller export partners, according to the report.

If a currency is widely used as a means of trade throughout the globe, it is referred to as “international.”

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It also praised the recent actions taken by the central RBI regarding foreign portfolio investment inflows and external commercial borrowings in the debt segment, claiming that they will broaden the market.

According to SBI Research, loan growth in the current year has increased by 2.6 lakh crores, a significant margin over bank deposit growth of 1.04 lakh crore.

“The continued growth in bank credit is a matter of comfort and indicates that Indian economy is still navigating through the turmoil rather well. There are several aspects of this credit growth,” it said in a report.

Furthermore, it said that different industries’ use of working capital has been negatively impacted across all sectors, particularly those directly related to the geopolitical concerns.

Petroleum, power, engineering, and cement are some of those industries.

“The good thing is that some of the consumer-facing sectors like leather, food processing did not witness a material decline in working capital utilisation. Even sectors like pharmaceuticals and new age sectors like healthcare did witness holding on to higher working capital utilisation limits,” the report added.