The recent decision by the International Monetary Fund to include the Chinese renminbi in the Special Drawing Rights basket and announcements by the Reserve Bank of India (RBI) allowing Indian companies to issue offshore rupee-denominated ‘masala’ bonds have triggered discussions on whether India is ready to ‘internationalize’ the rupee.
In popular discussions, rupee internationalization is often seen as a goal in itself. The notion that there needs to be a specific agenda for internationalizing the rupee is wrong.To explain this proposition, it is necessary to understand what is an international currency. Rupee will be an international currency if non-residents are willing and able to trade in it and invest in rupee-denominated assets.
To read further CLICK HERE