India Unveils Raft of Measures to Expand Rupee Globalization

India’s central bank unveiled fresh steps to enhance international acceptance of the rupee, joining by regional peers to globalize their currencies amid tariff-related trade disruptions.

The Reserve Bank of India plans to introduce reference rates for currencies of the country’s biggest trading partners, Governor Sanjay Malhotra said in Mumbai. At present, authorities provide such rates for the dollar, euro, pound and yen versus the rupee.

The RBI will also allow rupee balances held in special overseas trade accounts to be used for buying corporate bonds and commercial papers.

These measures aim to deepen the rupee’s role in global trade, reduce reliance on the dollar, and shield the economy from currency shocks. They come as steep US tariffs on Indian goods — the highest in Asia — threaten to weigh on export earnings.

“The steps announced by the RBI are essentially enablers for greater acceptance of the rupee in global trade,” said Ashhish Vaidya , head of treasury at DBS Bank Ltd. in Mumbai. The steps will likely help boost flows as India’s economy builds more global linkages, he said.

The rupee rose 0.1% to 88.67 per dollar after the RBI kept interest rates unchanged. It fell to a record low of 88.8050 on Tuesday. The currency is down 3.5% this year in Asia’s second-worst performance.

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The RBI also permitted local banks to extend rupee-denominated loans to borrowers in neighboring Bhutan, Sri Lanka and Nepal.