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'RBI should internationalise Indian Rupee'
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IANS | 07 Jul, 2022
The State Bank of India (SBI) on Thursday said the Reserve Bank of India
(RBI) should internationalise the Indian rupee.
In a research report, the SBI said that the central bank should make a conscious effort to internationalise the rupee.
"The
Russia-Ukraine war and the disruptions to payments caused by it, is a
good opportunity to insist on export settlement in rupee, beginning with
some of the smaller export partners," the SBI said.
The banking
major also welcomed the RBI's measures relaxing the external commercial
borrowing (ECB) and foreign portfolio investors (FPI) norms in the debt
segment.
According to the SBI, the global economy is volatile and
on an average, energy, base metals, precious metals, and agricultural
prices are now down 25 per cent from 52 week highs with markets
anticipating a global slowdown morphing into a full-blown global
recession.
However, it is not clear whether such decline is the
result of synchronised global rate actions or genuine fears of a
recession looming large, the SBI report noted.
In India, such
global developments could have a direct bearing on the inflation
trajectory in the second half of the current fiscal.
"The RBI has
been on course in normalising liquidity and net LAF (liquidity
adjustment facility) is now close to the 1.5 per cent threshold
non-inflationary level of liquidity. However, the problem is unspent
Government cash balances that has now jumped to Rs 3.1 trillion," the
report said.
This effectively implies that core liquidity is
still at Rs. 6.2 trillion as against Rs 8.3 trillion in the beginning of
April. Additionally, the RBI has also announced a slew of measures to
augment capital inflows by making NRI deposits more attractive.
The
SBI said the cumulative impact of all these measures will be beneficial
for the external sector given the fact that total Non-Resident Indian
(NRI) deposits exhibited an inflow of $3.2 billion in FY22 as against
the inflows of $7.4 billion in FY21.
On credit growth, the SBI
said it expanded at Rs 2.6 lakh crores far outstripping bank deposit
growth at Rs 1.04 lakh crore in the current year.
The continued
growth in bank credit is a matter of comfort and indicates that the
Indian economy is still navigating through the turmoil rather well.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
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64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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