India-Russia Oil Deals: The Dollar is Taking a Hit
It looks like there is trouble in paradise for the mighty U.S. dollar. After decades of ruling supreme in international trade, the greenback may be about to get knocked off its perch. The Indian and Russian governments seem to have a plan to challenge the dollar, and it lies in oil.
Big Deals from India and Russia
India recently signed a deal with Russia which involves India paying for that oil with the Indian Rupee, not the U.S. dollar. In an unprecedented move, Russia has also agreed to accept Rupees for part of the payment for natural gas. On top of that, Russia has also promised to buy agricultural products from India with its own currency.
Why India and Russia’s Deals Matter
The deals between India and Russia could have a huge impact on the dominant role of the U.S. dollar in international trade. For the past few decades, the U.S. dollar has been the preferred currency for international payments with almost 80% of all international payments involving the greenback.
What Might Happen in the Future?
It is difficult to predict the future, but it is safe to say that India and Russia’s deals will have an impact on the dollar. The two countries’ actions have already caused ripples through the international financial markets. If more countries follow India and Russia’s lead and begin to use their own currencies for international trade, the biggest loser will undoubtedly be the U.S. dollar.
It looks like India and Russia are serious about shaking up the world of international payments. Whether the U.S. dollar will remain the favored currency for international payments or if a new currency will take its place, one thing is for sure: it is going to be an interesting ride. So grab your popcorn, sit back and enjoy the show!
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