RBI notifies new measures for "International Trade in Rupee"

The Reserve Bank of India (RBI) announced new measures to streamline “international trade in rupees” on July 11, 2022. The move will boost global trade and highlight Indian exports. The Reserve Bank of India has announced new mechanisms for invoicing, payment, and settlement of rupee-denominated exports and imports.

All exports and imports can now be denominated and invoiced in rupees under the new system. Banks must, however, obtain prior permission from the RBI’s foreign exchange department before making payments in rupees. It will also address invoicing, exchange rates, and settlement issues. The market can then determine the exchange rate between two currencies.

RBI notifies new measures for “International Trade in Rupee”

Banks require a “Special Rupee Vostro Account” from the bank of the participating trade country in order to settle business transactions. Indian importers will have to pay in INR if they use this technique. To pay the invoice for the provision of goods or services from the international seller or supplier, this sum must be credited to a particular Vostro account of the foreign bank.

The Special Vostro Account’s remaining balance will be used to pay exporters who choose to send their goods and services overseas in Indian Rupees.

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