By Sergey Manukov
One can talk about modern India for a very long time. It is the fifth largest economy on the planet with the highest rates of economic development among the major countries, plust it is already planning to reach the second place by the middle of the century. India also is the most populous country on the planet. It is considered the largest democracy in the world. It is also the third largest importer and consumer of oil. Therefore, its entry into the de-dollarization process is very important and does not bode well for the US currency.
India and the United Arab Emirates (UAE) begun to trade between themselves in their national currencies: Indian rupees and UAE dirhams. New Delhi has just announced the purchase of the first million barrels of Emirati oil for rupees. The honor of becoming a pioneer in the process of debunking the US dollar from India fell to the country's largest oil refinery, Indian Oil Corp. It was it who paid for the oil of the Abu Dhabi National Oil Company not in dollars, as usual, but in Indian currency. The deal followed the sale to an Indian buyer of 25 kilograms of Emirati gold for Rs. The amount of the "gold" transaction was, according to Reuters, 128.4 million rupees ($1.54 million).
Last year, the Indian Central Bank announced a new mechanism for global trading in Indian rupees. In July, this mechanism began to operate with the signing of two oil contracts with the UAE.
The companies agreed to pay in national currencies to cut costs and avoid dollar conversions, and agreed to establish a special real-time payment system to facilitate transfers. A statement from the Reserve Bank of India explains that the agreements will facilitate rapid money transfers and enhance economic cooperation between the two countries.
At the same time, neither India nor the UAE are planning, at least in the near future, to somehow reduce the use of the US dollar. At least they don't officially announce it. Unlike Russia and China, which do not hide plans to overthrow the American currency from the throne in response to the sanctions policy and the aggressive international policy of the United States. And yet, even if the formal participation of a country like India in de-dollarization is difficult to overestimate. Surely, the involvement of Indian rupees in the fight against the dollar will to some extent accelerate the loss of the dominant position of the American currency.
In America, they see very well that clouds are gathering over the dollar, but they put on a good face for a bad game and repeat that they see no real threats to the greenbacks. Among high-ranking US officials, US Treasury Secretary Janet Yellen was the last to speak about the absence of threats to the dollar. At the very least, she does not seem to consider the decline in the share of the US dollar in global foreign exchange reserves by 8% last year alone a threat. The central banks of dozens of countries seem to take a different view and exchange dollars in their gold reserves for gold.
This article originally appeared in Russian at expert.ru