Dollarization and De-dollarization
India is wary of over-dependence on the dollar, and the RBI is hedging against dollar reliance but not pushing for de-dollarization. What do dollarization and de-dollarization mean?
Balance of Payments
The Balance of Payments is a statement or record of all monetary and economic transactions made between a country and the rest of the world.
De-dollarization
De-dollarization entails a reduction in the use of the U.S. dollar in world trade and financial transactions. Dollar no longer will be a global currency.
Vostro and Nostro Accounts
Vostro and Nostro accounts are used for the settlement of payments between banks on account of international trade and other cross-border payments.
Balance of Payments – Indian Economy, Previous Year Questions(UPSC CSE)(2011-24)
1. Consider the following statements: 1. Tight monetary policy of US Federal Reserve could lead to capital flight. 2. Capital flight may increase the interest cost of firms with existing External Commercial Borrowings (ECBs). 3. Devaluation of domestic currency decreases the currency risk associated with ECBS. Which of the statements given above are correct? (a)
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