India, neighbors in talks for cross-border Rs trade: RBI guv

RBI governor Shaktikanta Das has said the central bank is in talks with South Asian countries for cross-border trade in rupees. The RBI is also looking to reduce the cost of cross-border remittances by linking them with the Unified Payments Interface (UPI).

Delivering the keynote address at the IMF conference in Delhi, Das said that the central bank digital currency (CBDC), where the RBI has moved forward, can be an area for greater cooperation in future. In his speech, the governor highlighted the risks of high inflation and debt in the region. The IMF conference was on the current macroeconomic challenges faced by South Asia.

“The other initiative, together with the government, is the rupee settlement of international trade. We are already in discussion with some of the countries in this region and to facilitate rupee settlement of cross-border trade in the South Asian region,” Das said.

“Multiple external shocks in the form of Covid-related global supply chain disruptions, food and energy crisis following the war in Ukraine, and financial market volatility arising from the aggressive monetary policy tightening have exerted sustained price pressures in the South Asian economies,” said Das. He added that in the first three quarters of 2022, food price inflation in South Asia averaged more than 20%.