De-dollarisation not our objective, says RBI Governor Shaktikanta Das

He also mentioned that the idea of a currency for BRICS countries was floated by one of the countries; however, no decision has been made on the matter

Reserve Bank of India (RBI) Governor Shaktikanta Das said on Friday that de-dollarisation was not the objective of the central bank, and that it was only a part of “derisking” Indian trade, as dependence on a single currency could be “problematic”.

 

He was responding to a question on US President-elect Donald Trump’s threat that Brics countries would face 100 per cent tariffs if they chose to move away from the US dollar.

 

“With regard to de-dollarisation, etc, so far as India is concerned, there is no step which we have taken which specifically wants to de-dollarise,” Das said. “All we have done is that we have permitted the opening of Vostro accounts, and we have entered into agreements with a couple of countries to do local currency-denominated trade. That is basically to de-risk our trade. Dependence on one currency can be problematic at times because of appreciation or depreciation,” he added.

 

He also said a Brics currency was an idea floated by one of the countries, but no decision had been taken on the matter. “Unlike the Eurozone, which has a single currency and they have geographical contiguity, Brics countries are spread all over -- that also has to be kept in mind.”

 

Brics, a bloc of major developing economies, includes Brazil, Russia, India, China, and South Africa. Last year, the grouping announced an expansion that resulted in the addition of four new members: Egypt, Ethiopia, Iran, and the United Arab Emirates. Recently, Brazilian President Luiz Inacio Lula da Silva called on the Brics nations to create an alternative currency to replace the dollar in global trade.