Can Indian Rupees ever become an international currency just like dollers?
The Indian rupee is the official currency of India. It is symbolized by the symbol “₹” and is divided into 100 paise. The rupee is issued and controlled by the Reserve Bank of India, the country’s central bank. The Indian rupee is widely used in India and some neighboring countries, such as Nepal and Bhutan. The value of the rupee against other currencies can fluctuate due to several factors, including economic conditions in India and global market conditions.
On the other hand, the US dollar is the official currency of the United States of America. It is symbolized by the “$” symbol and is divided into 100 cents. The dollar is issued and controlled by the Federal Reserve, the central bank of the United States. The US dollar is the most widely used currency in the world, it’s widely accepted as a form of payment in many countries, and is also widely used as a reserve currency by central banks and other financial institutions. The value of the US dollar fluctuates based on several factors, including economic conditions in the United States, global market conditions, and the actions of the Federal Reserve.
Positive and progressive aspects of the Indian Rupee
Here are a few positive and progressive aspects of the Indian Rupee in the global market:
India has a strong and growing economy, which makes the Indian Rupee a valuable currency in the global market.
Increasing foreign investments:
India has seen an increase in foreign investments, which has boosted the value of the Rupee.
Reforms and initiatives:
The Indian government has implemented a number of reforms and initiatives aimed at attracting foreign investments, improving the business environment and boosting the country’s economic growth.
Large domestic market:
India has a large and growing domestic market, which makes it an attractive destination for foreign businesses and investors.
India’s strategic location at the crossroads of major global trade routes has made it an important hub for international trade and commerce.
Growing IT industry:
India has a rapidly growing IT industry, which is contributing to the country’s economic growth and strengthening the Indian Rupee’s position in the global market.
What should be done?
The central government plays a significant role in determining the value of a country’s currency, such as the Indian rupee, on the global market. The Reserve Bank of India (RBI) is the country’s central bank and is responsible for implementing monetary policy, which can affect the value of the rupee. The government can also influence the value of the rupee through its fiscal policy, such as by controlling government spending and the budget deficit. Additionally, the government’s trade policies, such as tariffs and import/export regulations, can impact the demand for the rupee and thus its value.
There are several ways in which the Indian government and the Reserve Bank of India (RBI) can work to increase the value and acceptance of the Indian rupee in the global market:
Maintaining a stable economy:
A stable and growing economy can help to attract foreign investment, which can increase demand for the rupee and boost its value.
High inflation can make a currency less attractive to investors, so keeping inflation under control can help to support the rupee’s value.
Building foreign exchange reserves:
The more foreign currency a country has, the more it can support its own currency during times of economic uncertainty. India’s central bank has been doing it by buying foreign currencies and keeping them in reserve.
Improving trade balance:
A positive trade balance, where a country exports more than it imports, can help to increase demand for the rupee.
Encouraging foreign investment:
The government can make it easier for foreign companies to invest in India by simplifying regulations and providing incentives, which can help to increase demand for the rupee.
International trade agreement:
India can negotiate trade agreements with other countries which can increase the acceptance of the Indian rupee in the global market. It is worth mentioning that these are long-term strategies that require consistent and sustainable effort, but can help to increase the value and acceptance of Indian rupee in the global market.
What future holds for the Indian Rupee?
The future of the Indian rupee is expected to be positive. India’s economy is growing, and its government is implementing reforms to attract foreign investment. Additionally, the country has a large, young population and a growing middle class, which are both positive indicators for economic growth. It’s worth monitoring the economic indicators and monetary policies of India to get a sense of the direction of the Indian rupee in the international market.
It is likely that the Indian rupee will become an international currency on the level of the US dollar shortly. The Indian rupee has a positive outlook in the global market and is increasingly being accepted. India’s economy continues to grow and develop, making it a key player in the global economy. Additionally, the Indian government has taken steps to liberalize trade and investment, which has increased the country’s international visibility and appeal. This, in turn, is helping to increase the acceptance of the Indian rupee in the global market.
Name : Shivani Singh
Course name : B.Sc Life Sciences
University : Ramjas College, University of Delhi.