Sri Lanka, which has been hit by a severe economic crisis, this time to take the country to the path of development and to increase the flow of money in the country, is going to take the Indian rupee.
Indian rupee will be used in Sri Lanka-India trade. This is because the Reserve Bank of India has given the green flag for Sri Lanka to use the Indian rupee for its trade activities with India.
The Indian rupee is in circulation for trade like imports and exports with Russia, which has already been subjected to various economic sanctions by Western countries.
Currently, 12 Special Vostro Indian Rupee Accounts have been approved in Russia, 5 Vostro Indian Rupee Accounts in Sri Lanka and one Special Vostro Account in Mauritius.
Sri Lankans and Indians will now be able to use Indian rupees for international transactions instead of dollars
In addition, through this, Sri Lankans can now keep Indian currency up to 8 lakh rupees. These rupees can be exchanged in banks in Sri Lanka for other currencies.
Many countries facing various crises due to shortage of dollar are also expressing preference to use Indian Rupee for trade purposes. Countries like Tajikistan, Cuba, Luxembourg, Sudan are included in this list.
The Reserve Bank of India is also in talks with India’s third largest trading partner, the United Arab Emirates, regarding the use of the Indian rupee for trade.
Earlier in the early 1960s, similar Indian rupee trade was in circulation with Gulf countries like Qatar, UAE, Kuwait, Oman and Eastern European countries. But after 1965 that system was abandoned.
In this case, if the Indian rupee is recognized as a foreign currency again, it is expected that India’s trade deficit will decrease and India’s strength in the global market will increase.