Investing.com – The de-dollarization trend accelerated this week as India’s top oil refiner used local currency to finalize oil deals with sellers in the United Arab Emirates.
So Indian Oil Corp ditched the greenback and used rupees to buy 1 million barrels of oil from the Abu Dhabi National Oil Company, the Indian Embassy in the UAE said on Monday, according to a Reuters report.
India, the world’s third largest oil importer and consumer, signed a contract with the United Arab Emirates last month paving the way for the use of rupees instead of dollars, which would help minimize costs by eliminating conversions in transaction dollars.
The two countries also agreed to establish a real-time payment mechanism to simplify cross-border transactions.
Monday’s deal marked India’s first payment of crude oil to the United Arab Emirates in rupees. This follows a recent purchase of 25 kg of gold by an Indian buyer from an Emirati exporter using rupees.
These steps are the latest in a series of recent maneuvers by countries, mostly non-Western, to divest themselves of the dollar.
De-dollarization has been gaining momentum since the United States imposed financial sanctions on Russia last year, and countries such as China, India, France and Israel have all shown interest.
The leaders of the BRICS countries (Brazil, Russia, India, China and South Africa) in particular stressed the need to have their own currency that is not denominated in dollars.
For its part, China is trying to internationalize the yuan to compete with the dollar and has made monetary agreements with Brazil and Argentina.
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