Reserve Bank of India (RBI) Governor Shaktikanta Das said that it is incorrect to say that there was a move towards de-dollarisation as the efforts of the central bank towards internationalisation of the rupee are not aimed at replacing the dollar.
“There is no such thinking to move towards de-dollarisation. The dollar will continue to be the dominant currency and whatever we are doing for internationalisation of the rupee, it is not to replace the dollar,” Das said on at the World Economic Forum (WEF) Annual Meeting 2024 in Davos late on Tuesday.
“India’s economy is expanding, with an increasing role in international trade. Gradually and steadily, India has entered new markets, countries, and products, particularly in services.
“The objective is to offer the rupee as an alternative currency for settling transactions in international trade. It is incorrect to describe the internationalisation of the rupee as an effort towards de-dollarisation.
“Dependence on one currency can be risky as the entire global trade will be subject to the volatility of that particular currency,” he added.
Das said the RBI has managed to achieve currency stability, making it ideal for overseas companies to invest in India and domestic companies to tap capital markets abroad.
Inflation in India is moderating and steadily approaching the central bank’s 4 per cent target while growth prospects remain robust, the RBI Governor noted.
Das also said that cryptocurrencies pose a huge risk, particularly for emerging market economies because it can impact your financial stability, currency stability and monetary system.
“Cryptocurrency as a product is highly speculative and my opinion and Reserve Bank’s opinion is that considering the big risk around it, I think countries like India should be very careful,” he added.