India wanted to trade with Russia in rupees, but in the end, Russia did not agree to it for various reasons. In such a situation, a part of the Russian funds lying with various Indian banks are being invested in India’s domestic bonds, the Economic Times reported.
Since the start of the Russia-Ukraine war, global crude oil prices have exceeded $100 a barrel. Western countries impose sanctions on Russia. At that time, India started buying large quantities of oil from Russia at a price discount. In this reality, India’s trade deficit with Russia has increased a lot.
Although it is not known exactly how much money Russia has invested in Indian bonds, bond market sources told the Economic Times that the ownership of ‘other’ categories of government securities is increasing.
According to the Reserve Bank of India, the share of ‘other’ categories in the ownership of government securities increased in the last quarter compared to the first quarter of 2022. It rose from 6.15 per cent in the first quarter of last year to 7.55 per cent in the last quarter.
In this case, the Economic Times has also given an account of the money. In the first quarter of 2022, these ‘other’ category investments amounted to Rs 5,20,000 crore; It rose to Rs 7,10,000 crore in the last quarter of the year. However, the RBI did not define who falls into this ‘other’ category. According to the Economic Times, non-bank financial institutions, some pension institutions and institutions like temple trusts fall under this category.
However, according to officials of the revenue department of various banks in India, the Russian idle money lying in various banks of the country has been invested in government securities such as treasury bills.
Even the central banks of different countries and some individual investors fall into this ‘other’ category. Meanwhile, India tried several times to reach a consensus on trade in rupee with Russia but failed. Russia believes that if trade in Indian currency is introduced, the surplus will exceed $ 4,000 crore (about Rs 3,27,120 crore) annually. Their question is, what will they do with so much money?
Experts say the rupee is not fully convertible to gold or other currencies, while India’s share in the international export market is only 2 per cent. That is why they are not interested in trading in Indian currency. According to government sources familiar with the talks, Russia is not comfortable with the rupee; They are rather interested in paying the price of goods in china’s yuan or other country’s currency.
Russian Foreign Minister Sergei Lavrov, who was in Goa recently to attend the Shanghai Cooperation Organisation (SCO) meeting, said the indian currency could not be used in international trade. Some diplomats believe that his one words were a “message” to reject New Delhi’s offer to trade in rupees.
From April 2022 to February 2023, India imported goods worth $41.56 billion or $41.56 billion from Russia. India’s exports to the country declined by more than 11.0 per cent.
According to NDTV, a large amount of Russian rupees are deposited in Indian banks. The country received the money from oil sales. However, these Indian rupees are not of any use to Moscow.
“We have hundreds of billions of Indian rupees, we can’t use them,” Sergei Lavrov told reporters. It’s a problem. We need to use this money. But for this, these rupees have to be exchanged in other currencies. The matter is currently under discussion. ’
