India in no rush for Re-Rouble mechanism

India is likely to take some more time to finalise a rupee-rouble payment mechanism to directly settle transactions because of the sharp volatility in the Russian currency and the fluid geopolitical situation. “We have discussed it… Our traders also don’t see any urgency in taking payments now and are comfortable allowing it to accumulate,” a top government official told ET.

The issue is being closely monitored at the top levels and the government is in touch with industry on a regular basis.

The rouble plunged to a low of about 136 per dollar in early March, from about 75, when the major developed economies slapped sanctions on Russia, following its invasion of Ukraine. The Russian currency has since bounced back to about 83 per dollar but is still volatile.

The commerce and industry ministry has created a dedicated mechanism to help traders facing any issue, given the conflict. A senior industry official said exporters were comfortable with waiting and settling payments against a government-backed mechanism. New Delhi had used third-country banks to settle trade with Iran when sanctions were imposed on that country. The government is, however, being cautious this time, mindful of the sanctions imposed on Russia.

Reserve Bank of India (RBI) governor Shaktikanta Das last week said the central bank will not do anything that goes against sanctions imposed on Russia.