How is internationalisation of rupee different from De-Dollarisation? Highlighting the benefits of internationalisation of rupee, discuss the challenges associated with the same.

Internationalisation of rupee refers to the utilisation of rupee in international transactions due to rupee's acceptability and accessibility Internationalisation of rupee vs De-dollarisation: i) Rupee's share in international transactions increasing (Currently ~ 2.76%) ii) Benefits globally → Decreases dollar hegemony (Preferred by Chinese Yuan and Russian Rouble) → Inclusive global trade iii) Russia-India Vostro and Nestro accounts → SCO, BRICS role in global economy Benefits of internationalisation of rupee: i) Ease of doing business for domestic exporters and importers (Full current account convertibility) ii) Ease of investments (FPI, FDI) remittances (100 billion remittances for India) iii) Establishes macro-economic stability of India → Counters China's belligerence iv) Establish reforms in multilateral forums like WTO, IMF, NB, giving voice to Global South

Benefits of internationalisation of rupee: i) Ease of doing business for domestic exporters and importers (Full current account convertibility) ii) Ease of investments (FPI, FDI) remittances (100 billion remittances for India) iii) Establishes macro-economic stability of India → Counters China's belligerence iv) Establish reforms in multilateral forums like WTO, IMF, NB, giving voice to Global South Challenges with intl of rupee: i) Global shocks => High impact locally (2008 financial crisis) ii) Difficulty in maintaining monetary policy and fiscal policy domestically (Triple paradox) iii) De-monetisation (like removing 2000 notes) becomes difficult to implement iv) Promotes sources of revenue for organised crime and terrorists by intra border and interborder transactions v) Low share of global trade (2%) => Less role of rupee in global currency FII in sovereign bonds => Improve bilateral trade with rupees as currency & Balanced capital account convertibility (1992 corridor) became hard currency => India's economic guarantee => Internationalisation of rupee, even in limited scale is necessary for achieving India's global power status by 2047

— ATLA THARUN TEJA · AIR 123