Former RBI Deputy Governor Thorat On Internationalization of Rupee

The video discusses India's economic growth and its efforts to increase its share in global trade. It highlights the challenges India faces, such as partial capital account convertibility and a low share of global trade. The video also explores India's attempts to internationalize the Indian Rupee and the potential impact on de-dollarization. Comparisons are made with China's currency internationalization efforts. The discussion extends to financial stability in emerging markets, emphasizing the importance of foreign exchange reserves and capital controls.

How does India's current share of global trade compare to its aspirations?

• India's share is around 7%, but it aims for more

• India is not interested in increasing its share

• India already has a dominant position

• India's share is decreasing

What is one of the main reasons India wants to increase the use of the Rupee in international trade?

• To increase its GDP

• To reduce exchange risk for businesses

• To become a reserve currency

• To compete with the US dollar

What is the purpose of India's special Vostro accounts?

• To facilitate trade with China

• To allow foreign banks to hold Indian Rupees

• To increase foreign direct investment

• To manage India's foreign exchange reserves

What is a significant difference between India's and China's approach to currency internationalization?

• China has current account surpluses, while India does not

• India has no capital controls, while China does

• China uses the US dollar for all transactions

• India's currency is fully convertible, while China's is not

What is one characteristic needed for a currency to become a reserve currency?

• It must be backed by gold

• It should have a dominant share of global GDP

• It should be the oldest currency in use

• It must be used only in domestic trade

Why is de-dollarization happening faster than expected?

• The IMF has become more influential

• Emerging markets have stopped trading

• Countries are building foreign exchange reserves

• The US dollar is losing value

What has been a part of the financial stability policies in emerging markets?

• Adopting the US dollar as the national currency

• Building up of foreign exchange reserves

• Reducing trade with developed countries

• Complete removal of capital controls