India’s use of rupee for import, export payments could boost Iran trade
Iran is seeking to boost trade with both Russia and India at present.
A new Indian financial policy could help the country’s trade with Iran.
What happened: The Reserve Bank of India decided Monday to allow imports and exports to be paid in India’s currency, the rupee.
The bank had a few motivations for the move. One is India’s trade gap, meaning the country is buying more than it is selling internationally. This could be responsible for the rupee declining in value against the US dollar. Allowing trade in rupees may also help India skirt Ukraine-related sanctions against Russia, according to the Indian news outlet The Economic Times. The Russian Federation is not allowed to use the SWIFT financial system, for example.
Foreign currency expert Marc Chandler wrote yesterday that the move is driven by India's desire to trade with Russia, pointing to India's increasing purchases of Russian oil.
