Reduced dependency on foreign currency makes India less vulnerable to external blows: Dy RBI governor

Mumbai, Oct 25 (KNN) To make India less vulnerable to external shocks reduction in dependence on foreign currency will help, said Reserve Bank of India Deputy Governor T Rabi Sankar.

Calling internationalisation of the rupee as a desirable objective of public policy he gave the reason that usage of rupee in cross-border transactions mitigates currency risk for Indian business and also reduces the need for holding foreign exchange reserves.

Explaining how protection from currency volatility not only reduces cost of doing business, he said it also enables better growth of business, improving the chances for Indian business to grow globally.

He further said that as increased use of rupee in cross-border transactions it requires a unified global market in the local currency both in interest rates and currencies.

Sankar said such unification would not only improve depth and liquidity of our markets, but they would also facilitate uniform pricing across borders.

RBI had also been putting in place enabling conditions by way of linking the domestic rupee interest rates and currency markets with offshore rupee NEWS, markets by enabling domestic banks to Op ASSISTANT in the offshore markets.  (KNN Bureau)