UPSC Current Affairs
De dollarization
Context: Recently, Reserve Bank of India (RBI) Governor Shaktikanta Das at the Davos World Economic Forum (WEF) 2024, addressed the topic of de-dollarization. He informed that while the Indian economy is expanding its role in international trade, there are no plans to specifically pursue de-dollarization. He said that the focus is on offering the Indian Rupee as an alternative currency for settling international payments and trade.
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Context: Recently, Reserve Bank of India (RBI) Governor Shaktikanta Das at the Davos World Economic Forum (WEF) 2024, addressed the topic of de-dollarization. He informed that while the Indian economy is expanding its role in international trade, there are no plans to specifically pursue de-dollarization. He said that the focus is on offering the Indian Rupee as an alternative currency for settling international payments and trade.
Context:
- Recently, Reserve Bank of India (RBI) Governor Shaktikanta Das at the Davos World Economic Forum (WEF) 2024, addressed the topic of de-dollarization.
- He informed that while the Indian economy is expanding its role in international trade, there are no plans to specifically pursue de-dollarization.
- He said that the focus is on offering the Indian Rupee as an alternative currency for settling international payments and trade.
- The highlighted the risks which are associated with a global trade system heavily reliant on a single currency, like the US Dollar.
- He suggested that by integrating multiple currencies into the trade system, risks can be distributed more evenly, making the system more resilient.
What is meant by De-dollarization?
- De-dollarization generally refers to the process of reducing reliance on the US Dollar in international trade and finance, and also shifting towards alternative currencies for global transactions.
- According to International Monetary Fund (IMF), the USD accounted for 59% of allocated currency reserves as of the first quarter of 2023, euro at just under 20% and the Japanese yen at around 5%.
- Prelims: Key facts, institutions, locations and terminology in the article.
- Mains: Connect the topic with Economy, Polity & Governance.
- Revision: Use the article headings to prepare concise notes and answer-writing points.
Test your understanding
Questions from this article
Prelims practiceWith reference to De dollarization, consider the following statements:
- Recently, Reserve Bank of India (RBI) Governor Shaktikanta Das at the Davos World Economic Forum (WEF) 2024, addressed the topic of de-dollarization.
- He informed that while the Indian economy is expanding its role in international trade, there are no plans to specifically pursue de-dollarization.
- He said that the focus is on offering the Indian Rupee as an alternative currency for settling international payments and trade.
Which of the statements given above are correct?
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
View answer
Answer: (d) 1, 2 and 3. All three statements are drawn from the article.
Mains practiceDiscuss the background, key issues and significance of De dollarization for India.
Answer in 250 words.
View answer approach
- Context:
- What is meant by De-dollarization?
- Background and context
- Key facts and institutional framework
- Significance and way forward
Frequently asked questionsFrequently asked questions
Why is De Dollarization in the news?
Context: Recently, Reserve Bank of India (RBI) Governor Shaktikanta Das at the Davos World Economic Forum (WEF) 2024, addressed the topic of de-dollarization. He informed that while the Indian economy is expanding its role in international trade, there are no plans to specifically pursue de-dollarization.
What are the key facts about De Dollarization?
He said that the focus is on offering the Indian Rupee as an alternative currency for settling international payments and trade. The highlighted the risks which are associated with a global trade system heavily reliant on a single currency, like the US Dollar. He suggested that by integrating multiple currencies into the trade system, risks can be distributed more evenly, making the system more resilient.
Why is De Dollarization important for UPSC preparation?
The topic connects current developments with Economy, Polity & Governance and is relevant for both objective revision and analytical answer writing.