In this article, we will discuss how India’s UPI is going to become international and how the Indian rupee can also go international. India’s UPI is a payment system that allows users to transfer money instantly between bank accounts through a mobile device. With this system, non-residential Indians (NRIs) who live outside India will be able to transfer money. This is a significant development as 2023’s start could not be better than this. India is also working on another strategy in the background. This action plan aims to make not only UPI but also the Indian rupee an international currency.
What is an International Currency?
An international currency is a currency that can be used for trade in multiple other countries. It is also known as Actively Traded Currency. In the past, people used the Barter System to exchange goods. But it had many limitations, which is why people made currency. Whenever a currency gets exchanged, one more thing gets exchanged, and that is “trust”. A currency has no value without trust. The more number of traders trust on it, the more value it will have. A currency has to be trusted by other people. Without trust, it has no value.
Why rupee needs to go international
India’s forex reserves have fallen to the lowest level. When the dollar’s rate keeps increasing, then the RBI starts selling dollars from their reserves to increase the supply and lower down the rate. In 2022, the RBI spent more than 40 billion dollars for keeping the Rupee stable. Today the situation is that India is a net importer country, which means overall, our imports are way higher than our exports. And for all these imported goods, we have to pay in dollars. The difference between this import & export is known as Trade Deficit. In the month of October only, our Trade Deficit was $26.91 billion. Our imports won’t decrease, and due to this, in the future, the dollar’s price is only going to increase.
Hope for Indian Rupee
India’s trade data of the past few years shows that there are 154 countries with whom India’s exports are more than its imports. Countries like China will never agree to trade in rupees, but Bangladesh and Sri Lanka can agree, and Sri Lanka has agreed to trade with India in rupees. If Sri Lanka doesn’t have dollars today, then it can pay in Indian rupees. Similarly, America has put sanctions on Russia, so they can’t trade in dollars. Sri Lankan rupee, in comparison to the dollar, has gone down by 84%, and in comparison to the Indian rupee, only 70%. India needs to transform the Indian rupee and make it an international currency.
India’s UPI is going to be international, which will allow non-residential Indians who live outside India to transfer money. India is also working on a plan through which not only UPI but also the Indian rupee can become international. An international currency is a currency that can be used for trade in multiple other countries. The more people trust a currency, the more value it will have. The Indian rupee needs to go international because India is a net importer country, and we have to pay for all our imported goods in dollars. However, there is hope for the Indian rupee. Sri Lanka has agreed to trade with India in rupees, and countries like Bangladesh can also agree. India needs to make the Indian rupee an international currency.