Reserve Bank of India Governor Shaktikanta Das stated on Friday that India has not taken specific measures to move away from the US dollar, commonly referred to as “de-dollarisation.” Addressing queries at the post-monetary policy press conference, Das explained that the central bank’s initiatives aim to de-risk trade rather than replace the dollar.

“We have permitted the opening of Vostro accounts for countries wishing to trade in local currency. This is part of de-risking Indian trade, as reliance on one currency can be problematic due to fluctuations in its value,” Das clarified. So far, India has agreements with two countries for local-currency-denominated trade, but de-dollarisation is not the goal. “It’s a narrative in some sections of the media. Our focus is to safeguard trade, not replace the dollar,” he emphasised.

Vostro accounts enable domestic banks to provide international banking services for clients with global financial needs. Das further revealed that one BRICS member had proposed a separate currency for the bloc, but no consensus was reached. “Unlike the Eurozone, BRICS countries lack geographical contiguity, making such a proposal challenging,” he noted.

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The remarks follow heightened discussions around de-dollarisation, spurred by US President-elect Donald Trump’s recent social media threat to impose 100% tariffs on imports from BRICS countries should they launch a joint currency. Das refrained from commenting on the threat but reiterated India’s intent to promote rupee internationalization.

The RBI’s July 2022 decision to facilitate international trade settlements in rupees has gained traction, particularly for Indian exports, furthering efforts to diversify trade mechanisms.

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