Task force on promoting local currency trade to meet tomorrow

NEW DELHI: Officials from economic ministries, Reserve Bank, SBI and industry bodies will deliberate on mechanisms for international trade in local currencies at their first panel meeting here tomorrow.

This task force for promoting local currency trade with various countries, was constituted by the Commerce Ministry.

The task force was earlier entrusted to mainly explore the possibility of entering into currency swap agreements with key trading partners.

However, it has later assigned the broader role of examining the mechanism for trading of goods in local currencies.

"The task force will meet tomorrow and deliberate on the possible mechanism for trading of goods in local currencies," sources said.

The terms of reference of the task force are to examine various types of trading of goods in local currencies and their implications for India's trade deficit.

Besides, it will study the pros and cons of trading of goods in local currencies for trade.

Moreover, it will explore the possibility of trading of goods in local currencies between India and identified countries and make recommendations accordingly.

"In view of the rising trade deficit and consequent current account deficit (CAD), a need has been felt to examine the role of trading of goods in local currencies in order to suggest a possible mechanism to address the issue," Commerce Ministry said in a note.

The task force, which will submit its recommendations in four weeks, comprises representatives from Commerce Ministry, Finance Ministry, Reserve Bank, State Bank of India, Export-Import Bank ( EXIM Bank), industry bodies Ficci and CII, export bodies EEPC and FIEO, besides others.

Weighed down by global and local factors, the Indian rupee has slid from 53.8 levels in April-end to 65-levels versus the dollar presently.