International credibility is as important to a country as whether a person is honest and reliable. The United States rushed to impose sanctions on Russia, and as a result, it made its own dollars like "**." On the one hand, the freezing of Russia's foreign exchange reserves, which is often used by the United States;On the other hand, it directly kicked Russia out of the global dollar trading system, which is quite ruthless.
The U.S. dollar is not only the currency of the United States, but also the international currency and the world's largest settlement currency. Kicking Russia out is like a schoolboy being expelled from school and barred from re-enrollment.
While this approach has been effective, it has seriously damaged international credibility, and other countries are worried about whether the United States will suffer like Russia if it one day annoys the United States. As a result, many non-Western countries are looking for ways to increase the variety of international currencies, such as India.
India's strength should not be underestimated. In April this year, India overtook China as the world's most populous country. And GDP has surpassed the UK to become the world's fifth-largest economy.
At this rate of economic growth, India is likely to overtake Germany and Japan for some time to become the world's third-largest economy after the United States and China.
Therefore, when India proposed to use its own currency rupee for international ** settlement, taking the first step in the internationalization of the rupee, Malaysia, the United Arab Emirates, Bangladesh, and Russia all signed agreements one after another. But the problem is that India's international credibility is not high.
Taking advantage of the collapse of the Soviet Union and the depreciation of the ruble, India used the rupee to repay its foreign debts and made a lot of money for Russia. Although Putin later found an opportunity to take revenge by "buying aircraft carriers for zero yuan", India's international credibility has become irretrievable.
The rupee has depreciated by 60 per cent against the US dollar since 1995, which also shows how powerful India is. Despite their annual deficits of hundreds of billions of dollars, they are still the fifth-largest economy.
Instead of inflation like Argentina, India has borrowed to maintain financial stability. The debt they borrowed was then administratively devalued and then repaid in the depreciated currency.
It's like if you borrowed 1 million from a relative to buy a house in a third-tier city, and after 30 years, you found that the money was only enough to buy a master bedroom. Your relative sells the house, pays it back, and can buy two more houses.
Naturally, other countries should be cautious about such countries. As a result, many oil and energy companies refuse to accept payments in rupees from India. Indian officials also calculated that from 2022 to the present, there has not been a single international oil settlement in rupees**. Although someone will mention Russia. But for Russia, there is no way to do it.
In the early days of the Russia-Ukraine conflict, Russia was hit hard by various sanctions. ** The relationship was suddenly broken, and it could only rely on India to take over. India did not suffer a loss, and made a lot of money from changing hands. Although Western countries know that India is playing tricks, they still turn a blind eye and no one dares to offend this international arms boss.
Russia also did not intend to admit it easily, refusing to pay in rupees and demanding to exchange for other currencies. In 2022, India imported $41.6 billion from Russia, while Russia only imported $2.8 billion from India.
Russia doesn't think India has anything good. The only rice of interest, India is not allowed to sell. So, the best option is to pay in US dollars in India. But India is also in dire need of dollars, and the deficit of hundreds of billions of dollars a year is not so easy to fill.
Russia can also choose to pay in yuan, after all, it can do business with China. But how could India, as a competitor to China, let Russia go so easily?India has come up with an idea: it can invest in India with the more than 40 billion rupees, so that there will be a stable chance of getting rich.
However, India has always adopted an attitude towards foreign companies, which is to blush at the sight of money and spend it happier than anyone else. Who would dare to do business with such a country?So it is not surprising that "most of the world's oil ** merchants refuse to pay in rupees".
That is, if a country's international reputation is damaged, it is almost impossible to recover. It is difficult for a country that has lost its credit to gain international recognition for its currency.