Russia, India settle $4 billion trade in rupees, abandon US dollar

In a multipolar world where the dominance of the US dollar continues to be questioned, the rise of discourse on the local currency is gaining more and more momentum. These currencies are strong, robust and equally capable of derailing the dollar, threatening its global reputation.

In a bid to revive the dollar’s derailment, Russia and India struck an arms deal worth $4 billion in local currencies, challenging the supremacy of the dollar.

Also Read: US Dollar Continues to Lose Strength Against Alternative Assets

Trade settled in rupees between India and Russia

US Dollar Deaths Drop, BRICS Currency TornUS Dollar Deaths Drop, BRICS Currency Torn

According to recent reports, a number of Russian companies have purchased robust weapons and defense equipment worth $4 billion from India. The deal struck between India and Russia was later settled in Indian rupees rather than traditional US dollars. The purchase was made over six to eight months through a concept called Rupee Vostro accounts.

A Vostro account simply refers to an account that a domestic bank holds so that foreign banks can trade in the former’s domestic currency. The concept involved Russia exploring Indian defense equipment by making settlement in rupees. According to local reports, the Russian Vostro account held nearly $8 billion in funds, half of which was spent on recent weapons purchases.

This development testifies to Russia’s anti-USD stance, denoting its ability to evade the use of the US dollar in all its procedures. The deal has also left the financial community plagued with questions related to dedollarization and whether the end of the U.S. dollar is really near.

The anti-dollar position

Russia has spearheaded the anti-dollar narrative with remarkable aggression of late. The nation recently completed $260 billion worth of trade with China, a deal that involved no dollars.

Also read: Middle East and African countries withdraw gold reserves from the United States

At the same time, the rise of multipolar monetary discourses helps local currencies attract global attention. As the BRICS alliance develops its own unanimous currency, the US dollar’s dominance sits at a precarious threshold. The inflation of debt indicators and the deterioration of the vertical sectors of the American economy also presurprise the American dollar. This could push the dollar to new lows, while witnessing the birth of new monetary alternatives.


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