Why in news
RBI Governor Shaktikanta Das clarified that India has no intentions of de-dollarising its economy.
The idea of de-dollarisation is not on the agenda, and India’s strategy focuses on reducing trade risks, not abandoning the U.S. dollar.
Indian Stance
While the idea of a common BRICS currency was discussed among member countries, no concrete decision has been made.
The geographical spread of BRICS nations makes a common currency challenging, unlike the Eurozone, which has geographical continuity.
India has entered into agreements with some countries to conduct trade in local currencies.
This is aimed at reducing the risks associated with the fluctuation of the U.S. dollar, not to replace it.
If potential tariff wars occur, they would likely trigger broader global reactions, such as retaliatory tariffs or currency devaluations, making it hard to predict the exact impact on India’s currency or trade.
India’s foreign exchange reserves are strong and adequate to handle any spillover effects from global economic events.
The government is prepared to take necessary actions if needed.
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