In trade deals with India, Russia has accumulated “billions” of limited convertible rupees that it cannot use in accounts with Indian banks. To prevent further accumulation of this currency, the yuan, dirham or rupee should be exchanged for other countries’ units of account, including gold. informs The newspaper Vedomosti cites industry analysts.
One of the main reasons for the problems that arise in bilateral trade agreements between the two countries is the high trade deficit of the Asian country. Against this background, Ingosstrakh Investments chief macroeconomist Anton Prokudin said Russia should convert limited convertible rupees into more reliable currencies of countries with a strong financial system.
“Export and import volumes between countries are clearly uneven. In the accounts of Russian companies, the currencies of other countries to which exports are constantly accumulated. To use them, you have to exchange them for currencies of other countries with a strong financial system,” he said.
Prokudin evaluated a number of currencies of developing countries among the most viable options for exchanging rupees. We are talking about the Indonesian rupee, the Brazilian real and the Mexican peso. At the same time, the transition process to other account units should be started as soon as possible, otherwise transaction costs in international trade will continue to increase.
On May 5, the New Indian Express, citing government officials knowledgeableTo date, the Indian and Russian authorities have not suspended trade negotiations with the local national currency, the Indian rupee. However, both sides have a number of issues that need to be discussed further, including the issue of converting the local national currency to other units of account.