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RBI Announces New Steps to Boost Rupee Trade
- 01 Oct 2025
On 1st October, 2025, the Reserve Bank of India (RBI) unveiled a set of new measures aimed at expanding the use of the Indian Rupee (INR) and other local currencies in international trade, lending, and settlement.
- The RBI has stated that Authorized Dealer (AD) banks in India, along with their overseas branches, will soon be permitted to extend loans in Indian Rupees to residents of Bhutan, Nepal, and Sri Lanka, including banks in these countries, in order to promote smoother cross-border trade flows.
- The central bank emphasized that necessary amendments to regulations will be notified shortly, providing a legal framework for Indian banks to facilitate INR-denominated credit lines to neighbouring countries.
- To encourage wider acceptance of the rupee in cross-border settlements, the RBI announced plans to expand the publication of reference rates by Financial Benchmarks India Limited (FBIL) beyond the current set of four currencies—USD, EUR, GBP, and JPY—so as to include select currencies of India’s major trading partners.
- The RBI clarified that the publication of additional currency pairs will allow banks to quote directly in more currencies against INR, thereby minimizing the need for multiple foreign exchange conversions and enhancing efficiency in trade settlements.
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