Sri Lanka has decided to use the Indian rupee (INR) for overseas commerce after the Indian government stated that it is exploring ways to include nations into the Indian rupee trade settlement system that are experiencing a shortage of dollars.
According to reports, banks in Sri Lanka have set up unique accounts called – Special Vostro rupee accounts, or SVRA, for trading in Indian rupees.
The Central Bank of Sri Lanka (CBSL) has stated that it is waiting for the approval of the RBI (Reserve Bank of India) to appoint the Indian Rupee as the foreign currency of Sri Lanka.
Since last year, the island nation’s economy has been deteriorating, particularly because of a lack of US dollars. They would benefit from liquidity support if the Indian rupee is declared the official currency.
Along with Sri Lanka, other nations that have been drawn to using the Indian rupee in international trade include Russia, Cuba, Luxembourg, and Sudan.
When other nations adopt the rupee in their international trade, India will be able to reduce its trade deficit and finally enhance its position in the market.
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