The path ahead for the rupee

The hottest conversation topic on every bank's treasury floor is internationalisation of the rupee

In mid-August, India and the United Arab Emirates (UAE) started settling bilateral trade in their local currencies with Indian Oil Corporation Ltd paying the Abu Dhabi National Oil Company in rupees for the purchase of a million barrels of oil.

This transaction happened roughly a month after the Reserve Bank of India (RBI) and the Central Bank of the UAE signed two agreements in Abu Dhabi for creating a framework to promote the use of local currencies for cross-border transactions, and interlinking their payment and messaging systems.

The objective was to ensure seamless cross-border transactions and payments. This could be