RBI holding talks with government on rupee-rouble exchange to enable exports from Russia: Report
Moscow has been facing sanctions on international payment systems as it invaded Ukraine on February 24.
The Reserve Bank of India is holding preliminary consultations on a rupee-rouble arrangement for trade with Russia, the Financial Times reported on Thursday. The arrangement will enable exports from Russia to continue.
Russia is facing sanctions on international payment systems as it invaded Ukraine on February 24.
RBI is discussing the matter with the Union government and state-owned banks. It is attempting to assess which banks would be able to provide such an arrangement, the newspaper quoted a senior banker as saying.
The Federation of Indian Export Organisations has asked the government to introduce the arrangement.
“So [the] government is working on it,” said A Shaktivel, the organisation’s president. “Very soon I think we’ll get this.”
According to Sammy Kotwani, the head of the Indian Business Alliance in Moscow, such an arrangement would mean that he could “give roubles to [Russia’s largest lender] Sberbank” and they can give him rupees in India.
Reuters on February 25 had also reported that the Indian government was looking into ways to formulate a mechanism for rupee payments for trade with Russia.
The United States, European Union, United Kingdom and Canada, among other major countries, have announced sanctions on Russia till now. Some of these measures target Russian state-owned banks and restrict the country’s ability to carry out transactions in major currencies.
Meanwhile, India may accept an offer by Moscow to buy crude oil as well as other commodities at a discounted price, according to a Reuters report on March 14.
On Tuesday, Union Minister of Petroleum and Natural Gas Hardeep Singh Puri said the government was holding conversations “at the appropriate level of the Russian Federation” regarding the purchase.
International oil prices had crossed the $100 per barrel mark for the first time in seven years as Russia invaded Ukraine on February 24.
Russia is the world’s largest exporter of crude and fuels and with numerous buyers boycotting the country, it has raised fears of supply disruption.
Higher costs are detrimental to India as it imports 85% of its crude oil.