Most trade today is conducted in hard currency such as Dollar USD, Euro EU or Japanese Yen, but these three currencies are printed in only 3 parts of the world and and dominate nearly 80-90% of global trade with US Dollar being the primary currency.
This has caused the dollar to inflate to its most powerful position in last 60 years, but has taken its tole on smaller economies.
Many countries buy goods in US Dollar stored in reserves and thus most of their transactions are at a heavy loss to both the importer and the exporter.
Trading in local currencies will save much of this cost and will also allow the actual valuation of the currency rather than pegging it to say USD.
This means if India sells more goods to US than it buys (Which is a fact) than the Indian Rupee must appreciate against USD, but since India pays to even gulf countries in currency which it nither prints or has any control on the actual price of USD is much greater than if dual Indo-US trade is considered.
Gulf Countries on their part have artifically pegged their currencies to the USD as International trade of oil is done in USD, but this should change and they should be willing to accept other currencies than dollar when they trade with countries such as India or China.
China on its part is already started the process by currency swaps of the Yaun, and many countries are willing to keep yaun as a reserve currency as they have a trade deficit with China.
So now it is time to forget the US dollar as a global reserve currency and try to promote our own currencies as a part of global trade and let its real value be determined by the market and forces of demand and supply.
This has caused the dollar to inflate to its most powerful position in last 60 years, but has taken its tole on smaller economies.
Many countries buy goods in US Dollar stored in reserves and thus most of their transactions are at a heavy loss to both the importer and the exporter.
Trading in local currencies will save much of this cost and will also allow the actual valuation of the currency rather than pegging it to say USD.
This means if India sells more goods to US than it buys (Which is a fact) than the Indian Rupee must appreciate against USD, but since India pays to even gulf countries in currency which it nither prints or has any control on the actual price of USD is much greater than if dual Indo-US trade is considered.
Gulf Countries on their part have artifically pegged their currencies to the USD as International trade of oil is done in USD, but this should change and they should be willing to accept other currencies than dollar when they trade with countries such as India or China.
China on its part is already started the process by currency swaps of the Yaun, and many countries are willing to keep yaun as a reserve currency as they have a trade deficit with China.
So now it is time to forget the US dollar as a global reserve currency and try to promote our own currencies as a part of global trade and let its real value be determined by the market and forces of demand and supply.
