How beneficial it is for Indian currency to be included in SDR
A more stable currency can guarantee that the currency's purchasing power stays stable and support a stable economy. The value of Indian rupees could rise internationally if they are included in the SDR basket.
1. What does SDR stand for ?
The Special Drawing Rights (SDR) or Paper Gold are monetary reserve currencies created by the International Monetary Fund (IMF) in 1969. The US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling are the five currencies that determine the value of the SDR.
SDR offers liquidity to the member nations of the International Monetary Fund (IMF) and can be exchanged for any of the five currencies in order to conduct trade and maintain foreign reserves.
2. In what ways could the country profit from the Indian Rupees's Inclusion in the SDR Basket ?
The inclusion of the Indian rupee (in the SDR basket) could make it one of the world's most trusted currencies.
It might help India's goal to internationalize the rupee, which would boost demand and cause its value to appreciate once other nations began to hold rupees.
The exchange rate cost of Indian currency with other currencies could be lowered by using it as the SDR basket currency.
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