In which countries is the Indian currency valid and why?
Do you know that the US dollar is used in over 75% of global trade? US dollars make up around 33% of the world's debt, while 60% of all dollars are spent outside of the US. Because of this, foreign nations and banks depend on dollars for trade. Because of this, the dollar is also referred to as "the international trade currency."
The dollar is referred to as the world's reserve currency everywhere. Any nation becomes ready to accept dollars as payment. But is the Indian rupee treated with such reverence? Yes, there are some nations that accept payments in Indian rupees with ease, despite the fact that it is not as widely accepted as the dollar in international trade. Please provide the names of each of these nations in this article.
Parts of Nepal, Bhutan, Bangladesh, and the Maldives recognise the Indian Rupee on a de facto basis. On the other hand, Zimbabwe accepts the Indian Rupee as legal tender.
India sends a lot of goods to these nations, hence their currencies are recognised as legal tender in those nations. It is crucial to note that export, not import, is the main factor that contributes to a currency becoming a "international trade currency."
It is important to note in this article that, with the exception of Zimbabwe, none of the other nations listed below have granted the Indian rupee the status of "legal tender," with the exception of those that are close to India due to friendly relations. accept the money of each other. The majority of currency exchanges in these nations occur in the states and the districts that border these nations.
Tell us specifically which nations accept or reject the Indian Rupee, and why.
1. Zimbabwe: Zimbabwe currently lacks a national currency. The Zimbabwe dollar, the nation's native currency, was abandoned by the southern African nation in 2009 due of the country's severe hyperinflation. Following this, it began to recognise other nations' currencies as its own.Currently, this nation uses the US Dollar, Australian Dollar, Chinese Yuan, Indian Rupee, Japanese Yen, South African Rand, and British Pound. Since 2014, this nation has been using the rupee as its official currency.
2. Nepal: You may purchase 1.60 Nepalese rupees with one Indian rupee. The fact that there were approximately 9.48 billion Indian notes in circulation in Nepal in 2016 when India demonetized can be used to estimate how many notes are utilised there. Indian traders are eager to conduct business with Nepal since they can swap one Indian rupee for more Nepali cash.
If we discuss the trade between the two nations, India purchased $ 570 million from Nepal in the fiscal year 2019–20. India is Nepal's primary source of imports. In 2019–20, it was $620 million.
Since December 2018, Nepal has prohibited Indian currency beyond Rs 100, while notes under Rs 200 are still freely accepted.
3. Bhutan: The Ngultrum is the name of this nation's currency. In this location, Indian rupee is also accepted for payment. There are $9000 billion worth of bilateral commerce between Bhutan and India. As of September 2018, Bhutan exported to India approximately 14,917 million NGT while importing approximately 12,489 million NGT from India. As a result of their proximity to India, this nation's citizens engage in aggressive currency exchange.There is no concern of losing money as a result of currency exchange rate swings because the worth of the currencies of these two nations is nearly similar.
4. Bangladesh: The Taka is the name of this nation's currency. Currently, one rupee of India can buy 1.28 Taka of Bangladesh. The bilateral trade between India and Bangladesh increased to roughly US$18.2 billion in the fiscal year 2021–2022. Thus, it is evident that Bangladesh uses Indian rupee in a significant way.
5. Maldives: The exchange rate between 1 Indian rupee and 0.19 Maldivian rufiyaa is well recognised. Some areas of the Maldives accept Indian rupees with ease. In 1981, India and the Maldives inked their initial trade agreement. India exports goods worth a total of US$ 117.8 million to the Maldives.
Thus, it is evident from the aforementioned article that India's currency is widely acknowledged in its neighbouring nations. This is primarily due to these nations' reliance on one another for commerce. Only Zimbabwe has, however, recognised the rupee as legal money.