Mumbai, March 19 The Reserve Bank of India (RBI) is working on providing more avenues for the use of Indian rupees (INR) accumulated by Russian trade partners, a senior official said on Thursday.
The central bank is exploring options to either settle Indian rupees held by Russian trade partners in India for imports or for making capital investments in India, he added.
"We are working on providing various avenues for using the INR, which is accumulated here by the Russian partners, to use it either for settling their imports or making capital investments in India, and so on," N Senthil Kumar, chief general manager in RBI's Foreign Exchange Department, said at the Russia-India forum in Mumbai.
Over the past few years, both countries have focused on local currencies to settle bilateral trade and reduce reliance on the US dollar. Last year, the RBI was allowed to invest surplus balances in government securities.
Kumar noted an "inertia" among stakeholders in transacting in local currencies and added that this needs to be overcome.
"There should be some level of trust that allows exporters or importers to use local currencies, which will help in increasing the volume of transactions that occur in INR," Kumar added.
Additionally, he urged for an increase in INR-Rouble transactions.
"Unless you conduct transactions, the market cannot evolve. So, as we continue to conduct transactions, and as we see a lot of interest in conducting INR-Rouble transactions, we will see the market evolve," he added.