De-dollarisation not on India's agenda; derisking domestic trade is: RBI Governor Shaktikanta Das

According to a Moneycontrol report, responding to questions about U.S. President-elect Donald Trump's recent threat to impose 100 percent tariffs on goods from BRICS nations, including India, if efforts are made to undermine the U.S. dollar’s status as the world’s reserve currency, Das said, "So far as India has concerned, there are no steps that India has taken which specifically wants to de-dollarise.

“All that we have done is that we have permitted opening of VOSTRO accounts and we have entered into agreements with two countries by now to do local-currency denominated trade. That is basically to de-risk Indian trade, dependence on one currency can be problematic due to appreciation or depreciation."

He emphasized that de-dollarisation is not part of India’s agenda.

Trump had earlier posted on the social media platform Truth Social on November 30, demanding a commitment from BRICS nations to refrain from creating or supporting any currency to replace the U.S. dollar.

He warned, "They will face 100-percent tariffs, and should expect to say goodbye to selling into the wonderful US Economy."

The BRICS bloc, comprising Brazil, Russia, India, China, and South Africa, is set to expand to include Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE from January 1, 2025.

Trump’s reaction appeared to stem from a BRICS meeting in Russia’s Kazan in October, where member nations endorsed the use of local currencies for trade.

However, while Russia has floated the idea of a BRICS currency, President Vladimir Putin has called it a long-term prospect rather than an immediate goal.

Das reiterated that no decision had been made on a separate BRICS currency and highlighted the logistical challenges involved.

Unlike the geographically contiguous Eurozone, BRICS nations are spread across different continents, making a unified currency complex to implement.

India, however, has been proactive in promoting local currency trade to address global trade disruptions caused by sanctions and a shortage of U.S. dollar reserves in some countries.

Following the RBI’s introduction of a rupee-settlement mechanism in July 2022, India began exploring this system with Russia, particularly after sanctions were imposed on Moscow in the wake of its invasion of Ukraine in February that year.

Earlier in the day, the RBI kept the repo rate steady at 6.5 percent for the eleventh consecutive time but reduced the cash reserve ratio by 50 basis points to 4 percent.