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India denies targeting US dollar amid global trade shifts

India denies targeting US dollar amid global trade shifts

GrafaGrafa2024/10/09 08:00
By:Liezl Gambe

India’s External Affairs Minister S. Jaishankar clarified that the country is not intentionally targeting the U.S. dollar in its economic policy. 

Speaking at the Carnegie Endowment for International Peace in Washington, Jaishankar emphasised that India’s trade practices are driven by practical concerns rather than an effort to diminish the dollar’s dominance.

According to Jaishankar, India’s approach is not focused on undermining the dollar but on ensuring that its trade relationships remain functional, particularly with partners facing dollar shortages. 

"We have never actively targeted the dollar," Jaishankar stated, adding that India’s trade adjustments are a response to specific situations, such as trading with nations like Bangladesh, Sri Lanka, and Nepal, which often struggle with dollar availability.

He explained that India is faced with the choice of either stopping trade with such partners or finding alternative settlement mechanisms. 

"There’s no malicious intent towards the dollar," he emphasised, distancing India from the dedollarisation strategies employed by some other countries like Russia and China. 

These nations have increasingly shifted away from the U.S. dollar in bilateral trade following events like Russia’s exclusion from the Swift system.

Jaishankar also touched upon the broader changes in global trade and currency usage, noting that multipolarity in geopolitics is being reflected in the diversification of currency reserves. 

Although currencies like the Chinese renminbi are gaining ground in international reserves, Jaishankar reaffirmed that India’s focus remains on practical economic considerations rather than attempting to challenge the U.S. dollar's global position.

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