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Informist, Friday, Dec. 6, 2024

--RBI Das on Trump tariff threat:Premature to comment, wait for policies 

--RBI Das: No steps taken towards de-dollarisation 

--RBI Das: No decision has been taken by BRICs on common currency
--RBI Das: Dependency on one currency to be problematic 

--RBI Das: Allowed trade via vostro accounts with 2 countries to avoid risks 

NEW DELHI – It is premature to comment on the US President-elect Donald Trump's threat to impose 100% tariffs on exports from BRICS nations, Reserve Bank of India Governor Shaktikanta Das said Friday, adding that the bloc has not taken any step towards de-dollarisation.

"The BRICS currency was an idea raised by one of the member countries, and it was a discussion. No decision has been taken," Das said, addressing a post-monetary policy press conference on Friday. "The geographical spread of the countries is also a factor that has to be taken for consideration," Das said. In 2023, the then Brazilian President Luiz Incio Lula da Silva proposed looking at the feasibility of a new common BRICS currency. 

Trump had last week threatened against the BRICS move. "We need a commitment from these countries that they will neither create a new BRICS currency nor back any other currency to replace the mighty US dollar, or they will face 100% tariffs....they can go find another sucker," Trump said Saturday, in a post on the social media platform Truth Social, owned by him. 

BRICS, an inter-governmental organisation, comprises Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates.

Das said while no step has been taken towards de-dollarisation, dependency on one currency is also problematic. 

"As far as de-dollarisation is concerned, as for India, there is absolutely no step that India has taken," Das said, adding that rupee vostro accounts were aimed at de-risking India's trade. "All we have done is permitting the opening of vostro accounts and have entered into deals with two countries now to deal with local currencies to de-risk our trade"

Trump's threat also comes at a time when the Indian government has been making a case for the rupee to be a hard currency and part of the world's currency system in the long run. "We will harden the Indian rupee over time so that it gets used more widely," Sanjeev Sanyal, member of the Economic Advisory Council to the Prime Minister had told Informist in an interview. "Presumably other countries will use it in Indian bonds or foreign exchange reserves," he had said, while adding that the move has nothing to do with de-dollarisation.  End

Reported by Priyasmita Dutta

Edited by Saji George Titus

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