1 week ago
RBI Deputy Governor Sets Vision for India’s Forex Market
India uses a foreign exchange market to help people and businesses trade with other countries.
RBI Deputy Governor Rohit Jain said countries may increasingly use their own currencies for these trades.
He said this can make payments cheaper and reduce problems caused by changing exchange rates.
India’s foreign exchange reserves and daily trading activity have grown substantially.
A system called the Special Rupee Vostro Account can help settle international trade in rupees.
Jain said future forex transactions should be digital from beginning to end.
Artificial intelligence and machine learning could help find errors and unusual activity, but people must remain responsible.
He also warned customers about unauthorised online trading platforms and urged banks to explain costs and risks clearly.
Rohit Jain said local currencies can reduce costs and mismatches in cross-border trade and payments.
India’s foreign exchange reserves rose from about USD 38 billion in 2000 to USD 691 billion in 2026.
Average daily domestic forex turnover doubled from USD 41 billion in FY22 to about USD 80 billion.
The Special Rupee Vostro Account framework supports international trade invoicing, payment, and settlement in rupees.
Jain urged more technology use and public-sector bank participation while warning about unauthorised online forex platforms.
- Who
- RBI Deputy Governor Rohit Jain, speaking to members of the Foreign Exchange Dealers’ Association of India.
- What
- Jain outlined priorities for making India’s foreign exchange market more efficient, resilient, accessible, and technologically advanced.
- Where
- At the Annual Day of the Foreign Exchange Dealers’ Association of India; the specific location was not stated.
- When
- He spoke at FEDAI’s Annual Day last week; the article cites data from 2000, FY22, and 2026.
- Why
- To help India’s forex market support growing international engagement, manage shocks, serve smaller users, and preserve trust while adopting new technology.
Key facts
- Foreign exchange reserves
- About USD 38 billion in 2000, rising to USD 691 billion in 2026.
- Daily forex turnover
- Average spot and derivatives turnover increased from USD 41 billion in FY22 to about USD 80 billion at present.
- Local-currency settlement
- Jain said it can lower transaction costs, reduce currency mismatches, improve settlement efficiency, and support trade where correspondent banking is costly or constrained.
- Rupee settlement framework
- The Special Rupee Vostro Account framework supports invoicing, payment, and settlement of international trade in rupees.
- Digital transformation
- Jain said forex transactions should be digital from origination through reporting.
- Technology applications
- Artificial intelligence and machine learning could assist with document classification, anomaly detection, and identifying reporting inconsistencies.
- Market risks and gaps
- Jain cited low public-sector bank participation in forex derivatives and complaints of cheating and fraud involving unauthorised online forex platforms.
Quotes
Rohit Jain
RBI Deputy Governor and senior bank official
“Our market would be ready for the next decade if it can help facilitate India's ever-increasing engagement with other countries, absorb shocks in a non-disruptive manner, serve the smallest user as efficiently as the biggest, and embrace new technology without vitiating the trust it has earned.”
rediff.com
“The settlement of cross‑border transactions in local currencies results in lower transaction costs, fewer currency mismatches, better settlement efficiency, and the ability to trade where correspondent banking is costly or constrained.”
CNBC TV 18
Sources
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