New Delhi: India is preparing to lobby major trading partners including Japan, Iraq and Venezuela to accept rupee payments for some of their exports, one of a series of moves to stabilise the volatile currency and make it more globally acceptable.
Restrictions on large transactions of rupee against foreign currencies are intended to protect India from sustained speculative assaults, but they also limit interest in the rupee and foreign investment flows.
A panel set up in August to study currency swaps has now won support from the finance ministry, the commerce ministry and the central bank to target about 10 countries for such deals, focusing on oil exporting nations and others that run large trade surpluses with India, three sources said.
The panel is likely to within the next few days on the size of the swap deals it will seek and finalise which countries to target first, said two sources who have attended meetings.
The finance ministry has already agreed in principle to lobby Venezuela to accept rupees for some oil transactions. Another idea is to accept some partners' currencies for trade.
“There is a broad agreement between the commerce and finance ministries and the Reserve Bank of India to push currency swap agreements, particularly with the countries with which India runs a large trade deficit,” a senior trade ministry official with the direct knowledge of the issue, said.
China is already keen to start yuan-rupee trade, and India is hopeful Japan may show interest in the payments.
The idea is to target oil producers in Iraq and Venezuela.
