Internationalization of Rupee

In January 2025, the Reserve Bank of India (RBI) has amended the Foreign Exchange Management Act (FEMA), 1999, enabling greater use of the Indian Rupee (INR) in cross-border transactions.

Key Amendments

  • Non-residents can now open INR accounts in overseas branches of Authorized Dealer (AD) banks for permissible transactions with Indian residents.
  • Non-residents can settle transactions with other non-residents using:
    • Special Non-Resident Rupee (SNRR) Accounts
    • Special Rupee Vostro Accounts (SVRAs)
  • Exporters can now maintain foreign currency accounts overseas for trade settlements.

Internationalization of Rupee: Significance

  • Reduces dependence on foreign currencies, particularly the US dollar.
  • Minimizes exchange rate risks and external vulnerabilities.
  • Lowers the need for large forex ....
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