Indian Currency: The right time to strengthen the Indian rupee has not yet come. At present, India should give more emphasis on becoming a middle income country. Till then, India should make efforts to promote the use of rupee in global trade. At the stage the Indian economy is currently in, the strengthening of the rupee can have a very negative impact on many sectors. This advice has been given by think tank Global Trade Research Initiative (GTRI).
Pay maximum attention to inflation, economic growth rate and trade
According to the think tank, the needs of the Indian economy are completely different. At present, the country should pay full attention to controlling inflation rate, maintaining economic growth rate and trade balance. If an environment of stability is created on these three fronts, confidence among international investors and trading partners will also increase. The central government and the Reserve Bank (RBI) should also make strong fiscal and monetary policies. In this, debt management, appropriate interest rate policies and stability of foreign exchange reserves will also play an important role. This goal will become easier to achieve with increasing worldwide acceptance of the rupee.
Political stability is also very important
According to the think tank, political stability is also very important for India. This sends a good message to investors. People ready to invest money in India see political stability as a symbol of economic stability. Strong currency is a symbol of stability, trust and economic strength of any country.
US dollar the strongest currency
The US dollar is considered the strongest currency. It is easily accepted all over the world. But India should wait now and think about strengthening the rupee only after the economy becomes stable. The dollar’s share in international transactions is 60 percent, the euro 20 percent, the Japanese yen about 5 percent and the pound about 5 percent. Rupee is still very low in this list.
Reserve Bank should fix the system
RBI had created the system in July 2022 to promote the rupee in trade with African and South Asian countries. But, there is a dire need for improvement in this. The use of Indian rupee should also be increased in trade with Russia and China.
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