This is a good opportunity to push for export settlement in rupee, the report said.
New Delhi:
SBI Research said in a report on Thursday that the Reserve Bank of India (RBI) should make a conscious effort to internationalize the Indian currency rupee amid disruption in payments due to the Russo-Ukraine war.
This is a good opportunity to focus on export settlement in rupee, starting with a few smaller export partners, the report said.
A currency can be called “international” if it is widely accepted as a medium of exchange around the world.
It also welcomed the central RBI’s recent measures on foreign portfolio investment inflows into the external commercial borrowings and debt segment, saying this would lead to market expansion.
On credit growth, SBI Research said it has expanded Rs 2.6 lakh crore in the current year excluding bank deposit growth of Rs 1.04 lakh crore.
“The continued growth in bank credit is a matter of comfort and shows that the Indian economy is still going through turmoil. There are many facets to this credit growth,” a report said.
Further, it said that the use of working capital by various sectors has had an adverse impact on those sectors particularly those associated with geopolitical tensions.
Those sectors include petroleum, power, engineering and cement.
“The good thing is that some consumer-facing sectors such as leather, food processing did not see any significant decline in working capital usage. Even new age sectors such as pharmaceuticals and healthcare have high working capital utilization. limits were observed,” the report added.