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RBI lets Iran Take Rupees For Oil


From The Hindu:

In an effort to resolve a long-standing payment crisis, the Reserve Bank of India has given permission to the Central Bank of Iran to open rupee accounts with two Indian banks — UCO and IDBI.

He said that the Iranian central bank would park funds in the two Indian banks to enable payments for oil imports by India as well as non-oil exports to Iran.

To a query, he said it was not yet known whether the Iranian central bank had already parked funds in the two accounts.

The official said while payments for oil imports would initially be in rupees, it would be then converted into a separate currency, which was yet to be decided by the apex bank.

To some extent Iran can pay for things it imports from us – like Tea – in rupees. But RBI needs to really loosen up and let them hold rupees outside the country’s borders. Which means a complete freeing of the rupee, immediately.

It will take a crisis for anyone in this country to act, it seems. Well, so we’re getting one.


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