The Indian Rupee now seeks to become the second reserve currency in the world.

 Over the past month, the Indian Rupee (INR) has experienced a significant decline in value relative to the US Dollar (USD). As a result, the INR's buying power on the global market has declined, and import expenses have gone up dramatically. India suffers greatly from the devaluation of the INR because of its heavy reliance on oil imports.

India made an agreement with the UAE in July to pay the oil bill in Indian rupees as a proactive reaction to this difficult scenario. This setup is a workaround. India had also traded Indian rupees for imports of Russian oil. India now buys crude oil from 39 nations, so there is a lot of room for such an agreement with other nations.

In light of the most recent information, discussions are underway regarding the RBI adopting steps to allow INR in Thailand, an increasingly popular overseas travel destination for Indians.

RBI allowed banks in eighteen countries to open Special Vostro Rupee Accounts (SVRAs) for the purpose of settling payments, hence establishing the system for rupee trade settlement.

The process of internationalizing INR involves all of these processes of using INR as a payment method rather than paying using foreign money, in this example USD. Longer term, investors (local and international) will gain from the following advantages if this approach is completed successfully:

୦    Decrease in currency appreciation and exchange rate volatility

୦    Growth of foreign capital inflows into the economy as a result of lower currency fluctuation risk, considering that the majority of international companies wish to open offices in India and that investors want to place their bets on the potential

୦    Lower import costs will help countries' balance sheets and decrease their current account deficit.

୦   Help India by increasing its geopolitical power due to the development of bilateral trade agreements that will increase its conomic relations with other nations.

୦    Relieve the RBI of the burden of having to maintain large USD reserves, which as of March 29 were at an all-time high of $645.6 billion.

America is a powerhouse in large part because of its strong currency, which makes up more than half of the foreign exchange reserves held by central banks worldwide. Most international trade is conducted in US dollars. It makes it easier for the USA to create more money and makes it easier to borrow more money from other nations.

India is currently the main developing economy in the world with the quickest rate of growth. It is anticipated to become the third largest economy very soon. There is optimism around the world for the Indian economy. India is now included in the Global Emerging Market Bond Index of JP Morgan and Bloomberg. With such a strong foundation, there is reason to hope that the Indian rupee will become a substitute reserve currency. The Reserve Bank of India (RBI) and the Government of India (GoI) have made considerable progress in encouraging global acceptance of the Indian rupee (INR).

The Indian financial market will directly benefit from the internationalization of the INR in addition to reducing transaction costs on overseas trades. As the INR strengthens, capital flows into the debt and equities markets will increase. Investor confidence in the market and liquidity will both increase.

The strong and stable INR will also boost the purchasing power of Indians, advance economic growth, and provide greater returns for foreign investment. India and the world economy will therefore benefit from the internationalization of the INR.

Technical Prognosis:

Growing geopolitical concerns in the Middle East caused the Indian market to experience increased volatility last week. Over the week, the Nifty saw a 1.65% correction, ultimately closing at 22,147. Businesses have started to release their Q4 earnings, which has led to anticipation of large fluctuations in the market.

One important measure of volatility, the India VIX, had a spike of over 16%, which was its biggest weekly rise of the year. FPIs, or foreign portfolio investors, kept selling their stocks. With Nifty IT falling 4.7% last week, the Nifty is still below its crucial 50-day moving average (DMA), which indicates a poorer overall market sentiment.

Above roughly 21,800, immediate support is predicted, and above 22,400, resistance. A "sell on rise" approach is advised for the upcoming week, at least until the Index crosses 22,400.