India buys oil from UAE by paying rupees, will the dollar's reign end?

Recently India bought one million barrels of oil from UAE and paid in Rs. In July, during PM Modi's visit, there was an agreement to do business in local currency. This is a big step taken to end the reign of dollar.

For almost two years, America has been increasing interest rates to reduce inflation and strengthen the dollar. On the other hand, in the global economy, a separate narrative is also being created regarding the dollar, that is, instead of the dollar, the rest of the world should strengthen their currency.

Taking this series forward, India and UAE have come forward. India has bought one million barrels of crude oil from UAE. For which India has paid UAE in Rs. This purchase has been seen after India's PM Narendra Modi's visit to UAE in July. Earlier, payments were made in dollars between the two countries.

Now between the agreement of transaction in rupee and dirham, dollar or say that America has suffered a big blow. Along with this, India has also made America realize its strong position in the Gulf countries. Apart from this, those countries have also been indicated that in the coming days, India will do business only in rupees with those countries with which India has strong business relations.

This will be beneficial

Most commodity deals around the world are usually settled in dollars, but India, the world's third-biggest oil importer and consumer, signed a contract with the United Arab Emirates last month, opening the door to using the rupee instead of the dollar. Gaya, which will reduce the cost by removing dollar conservation from the transaction. Both also agreed to implement real time payment mechanism to facilitate cross border transactions.

Recently bought 25 kg gold for Rs.

Monday's deal is the first payment of crude oil by India to the UAE in rupees. Recently a buyer from India has bought 25 kg gold from a gold dealer in UAE. Whose payment has been made in Rs. This step has been taken by the non-western countries to end the dominance of the dollar. Dedollarization has accelerated since the US imposed financial sanctions on Russia last year, and countries from China and India to France and Israel have shown keen interest in it.

China is trying

Leaders of the BRICS countries – which include Brazil, Russia, India, China and South Africa – have placed special emphasis on their own currency. Meanwhile, China is trying to internationalize the yuan to counter the dollar and has struck currency deals with Brazil and Argentina. While the dollar remains dominant as a method of payment, Stephen Jane, chief executive of Eurijon SLJ Capital, wrote in a note earlier this year that the dollar's share of global reserves is set to decline sharply in 2022, compared with the previous high. The average rate seen in two decades has decreased by about 10 times.