Topic: India just bought 1 million barrels of oil using rupees instead of USD - page 5. (Read 802 times)

Laughable. Obviously it's going to be a game of hot-potato. What country would truly be willing to hold the Rupee as a foreign reserve when it isn't really as useful as the U.S. Dollar in international trade? What CAN Saudi Arabia do with the Rupees it accepted? It's currently losing value against the Dollar.

Few refuse to understand that there are simply too many nations/states that are depending on the Dollar to succeed, including India and Saudi Arabia.

 I Have carefully gone through the article, I'm seeing a serious power play within the committee of nations.
The De-dollarization of the oil market has just Kickstarted.
The new merger of BRICS countries and them adding extra 6 countries into their fold speaks a loud volume as to the actualisation of De-dollarization campaign. I just hope if this new trend won't affect the price of oil at the international market, especially for countries that heavily depends on oil for their revenue.

Even in history, Saudi has had no choice but to become friends with the US for their security which the petrodollar was created. Now that Saudi and Iran are at peace, they don't need security anymore. And they have a new ally as well in the form of China. This is all China's initiative of course it is the "Adversary" that we knew. But seemingly countries that have been sanctioned by the US are uniting.  

As long as India doesn't use Yuan, I guess the US will not see it as a very offending issue. They are friends as far as Mody knows. he needs the US if war breaks in the India-China borders.

For any country to free from petrodollar system, it has to take serious decision to do things on their own. And what India did is a very good step to take and if they can sustain it forever because leaving dollar for rupees is just like a war against America and America will look for another way to fight back either economic way or technology way. So India should also be prepared to face the drama of theatre that is coming on their way. America will not sit down and watch them.

I heard such news in another African Country recently.  A country that the military  just over through their civilian government and took over the government has stopped importation from other countries and I also heard it from another country that is ruling by a military government in Africa that also stopped importation of goods. And if African countries can do this and use their money to buy things in the international market and drop the dollar then, local currencies will have value in their countries. Petrodollar system is the one that is killing the Africans economy.

This looks bad for the USD if it continues. Many major oil producers don't like the US. Saudi Arabia used to be a very good friend to the US and now they act like an enemy. What did the US do to anger these people I don't know. It looks like the US lost their biggest and the only partner in the Middle East. If you can't buy oil with the USD, then why would anybody hold it anymore? The USD is slowly losing its biggest use case which is buying oil. When the USD dies, hopefully bitcoin will take over and maybe then BRICS countries will start using bitcoin. That would be a great win for everybody.

The reality of the situation occurring here, is less the fact that the US dollar is not being used as the currency of preference and more to do with the games that the UAE has proven they are willing to play. The are most likely trafficking Russian oil in disguise, because the UAE doesn't produce that much oil compared to it's neighbors. In reality the UAE is probably the middleman, and is trying to send a statement that India is a stronger country without the implication of saying that Russia is being forced to accept a less useful currency in return for their oil. The world is changing, however this is not even a blip in the huge volumes that are being transacted every day and frankly nobody is that keen on accepting the Indian rupee unless it's the only choice they have. This is a marketing ploy that some simpler minds accept without understanding.

You are right, this is exactly what the US expects. For decades, the US has been exporting its inflation to developing countries, and now if developing countries learn to trade among themselves in their national currencies, the huge released surplus dollar money supply will have to go back to the US and this is not good news for the US. Actually, this process is already underway and it did not begin today.

I can also say that the difficulties with external borrowing for the US will also increase. Already today you can borrow the US government at 5.5% per year (which is comparable to the interest on bonds of many developing countries of the "third world"), and servicing your debt costs the US government a trillion dollars a year. Soon the habit of living beyond one's means will cost Americans too much.

Before the oil crisis in 1973, the whole world actively used the US dollar in international trade, because the dollar was pegged to gold. That is, the world traded for gold, but used the dollar as a more convenient alternative.

The extent of your worship of the dollar is amazing. If you were better versed in economics, you would be a more interesting conversationalist, otherwise you are just an idiot stuffed with Western propaganda. Boring.

You overlooked yourself the fact that I described another experiment just like this one. 
Russia sold oil to India for rupees, got a ton of useless toilet paper , canceled the deal.
Now UAE is selling oil for rupees, it will get a ton of toilet paper, it will....do what?


then..... nothing will happen! If there were a better currency that would have an actual use and be stable enough I would guess all those dollar haters would be in campaigns that pay 1000 yuan/week, 20 million Zimbabwe dollars or 1000 quadrillion bolivars, but, kind of weird, there is no such thing and if I go to the market place on this forum all I see is $$BTC$$BTC$$$BTC$.
Don't you think it's beyond funny how we talk about de-dollarization in the most dollarized place on the internet?
Let's wait till Chart Buddy shows the price in rupee and then talk about this fantasy!


Yeah right, what was the world using before 1970?
The whole Middle East will run out of oil before you will get rid of the dollar!

What you say makes a lot of sense, but you seem to overlook the fact that the news item linked in the OP is from 21 August, 3 and a half months after the second news you quote, in which the negotiation was suspended.

The fact is that several countries are thinking of trying to reduce the hegemony of the dollar. It is another matter whether they will succeed, and if their currencies are much worse than the dollar, it will be difficult, but there have been cases in the recent past in which those who dared to sell oil in other currencies were subjected to a war to dethrone them, such as Saddam Hussein.

From what I witnessed today about the BRICS carrying out its purpose to minimize the influence of the dollar in international trade, and yes this also makes it easier for countries to make transactions, witnessing what India is doing with all its partners will certainly be a new trend than using petro dollars.

Regarding this matter, when everyone acknowledges the effectiveness of using local currency in conducting international transactions, it seems that everyone will switch and ignore the dollar. and we know that when this increases, the dollar will return to its origin, which may push inflation higher because it will result in the circulation of dollars in their country of origin.

All the current power of the dollar is based on the foundation of an agreement between the United States and Saudi Arabia, concluded in the mid-1970s, to which all OPEC countries joined a little later, and the essence of which is that oil around the world is sold for US dollars (these US dollars are kept in American banks and under their security the IMF issues loans to needy countries). Now this agreement has lost relevance. It is not necessary to completely abandon the US dollar in international settlements, it is enough if a significant part of the oil trade switches to mutual settlements in national currencies. The dollar itself, of course, is not going anywhere.

It would take a more for them to completely get rid of the petrodollar as we knew it, as I already expressed in my previous post.
Assuming the USA does not become 100% energy independent, there will be countries outside BRICS+ which will continue to accept USD in exchange for energy. Venezuela, is an example of a country which does not affiliated yet to BRICS+, is close to the USA and has the biggest oil reserves in the planet.

Granted, Venezuela has expressed that it would be willing to enter BRICS+ but it has not happen yet, while we continue to be outside the alliance and we keep our volume of USD high, the USD-backed oil will continue to be a thing. Despite of the sanctions, Chevron continues to be allowed to drill and extract crude oil here.

Yep. The new BRICS in an expanded format will include the entire Middle East oil triangle from the UAE-Iran-Saudi Arabia with control of the strategically important Strait of Hormuz, plus India and China with a total oil demand of 15-17 million barrels per day, which they of course prefer to buy from partners in the alliance and without the participation of the US dollar. In such scenarios, the petrodollar may become a thing of the past, but this is the foundation of the entire modern world financial system. At the recent summit, the BRICS did not announce the creation of a new reserve currency, but it seems to have buried the old one with its expansion.

I quite understand your plight but I wouldn't want to go deep into the de-dollarization as many would want, it will not happen, at least not in the next century. Also, the US dollar and other external currencies are not affecting any nation that is doing well, especially when they export well, they would rather earn more Forex and still be able to feed themselves and locally spend their currency without issues depending on foreign currency. De-dollarization is overemphasized.

The world still needs a central currency that is trusted for reserve and such must be that even the strangest and remotest country in the world will still be able to recognize and exchange it for their local currency. Believe me, the USD didn't achieve its feat overnight, it takes economic relevance, politics, philanthropism, leadership and commitment to achieve it. How many of those countries pushing for the so-called de-dollarization have these?

What I see is jealousy, they want to be in the US's position overnight, which is never gonna happen because they don't have all it takes. Indians' case is minimal and you can see that in my light tone from the initial post, but certainly not the selfish China and overbearing Russia.

The two currencies that could push for this influence that people are not even talking about are the Euro and the Great British Pounds, and even the Swiss Franc. But because people in the Bloc and the UK understood the situation and economics better, they didn't even bother. But rather continue to find their ground of influence in the world and work more on their internal economy instead of enmity.

It has been months since I started to see news about how the USD is allegedly starting to lose its relevance in international markets and how countries have started to ditch the dollar, etc. Nothing seemed to have changed, I think or at least not in a wide scale.

Let is be honest, regardless of the big problems the American society and economy is going through, the fact is that USD is still one of the currencies preferred around the planet for settle transactions, even here in my country, where people in power had long talked about the cons of the American dollar, we have been almost completely dollarized due to inflation and the loss of trust in our own currency.

It is possible for the dollar to lose further relevance and volume outside USA, that is true; but in order to reach just point, it would take more than 1 million barrels of oil. It would require a complete change on how business take place in countries like China, India, Iran, Brazil and some industrialized republics.

Just the fact the Federal Reserve offers relatively high interest rates for their bond holders is good enough for institutions and entire countries not to completely ditch their USA bills for other local banknotes.

The Local Currency Settlement System (LCSS) agreement targeted at promoting the use of rupee and Durham was signed in June this year. The implementation of this policy now is proof that both nations are serious about the policy. This is a good step because India and the UAE are major trade partners. In 2022-2023 their trade transaction was worth about $84.5 billion and they are still committed to expanding their investment. The choice of using their local currency has economic benefits because it is cheaper and more convenient. The hurdles of converting their local currency to the dollar have been eradicated by this move.

The problem now is how many nations will be willing to accept the rupee from the Arab Emirates (UAE) for International trade. The dollar makes payment systems in international trade easy and stable. Both nations still have to engage in trade with other nations that accept only dollar payments which means that the rupee or Durham will still have to be converted to the dollar because the global market is highly dollarized and it will be very difficult to bypass the dollar in international trade. For now, this move is not a threat to the dominance of the dollar but if other nations follow the same local currency payment system and another currency begins to gain international adoption the dollar might start losing its global influence gradually. For now, the dollar is still powerful and safe.

I know that's why I mentioned the hypothesis of political pressure on the United States, all the countries that are allied with the United States are in the corner after Russia's war on Ukraine, so expect them to do anything.

The foreign policy of the United States in recent years has made many allies look for alliances with each other, and the rain is beginning to drop.
If this policy continues, more countries will reduce dependence on the dollar in international trade, here bitcoin may come as a solution if we reach levels of 5-20 trillion.

It is true that UAE dirham is pegged to USD but I think that the Indian community there is large. Indian rupees and dirhams may be used for citizens’ transfers. The same money may be used to buy meat from Brazil or products from China. We are talking about an emerging market that has new options for recycling oil money instead of The classic dollar option.

Over dependency kills faster than we think, we can't be like this forever and this might started like revolution of de-dollarization, if other countries follow the same, it will have more more effect on USD as countries will only strengthen their own currency instead of USD. It's all about how good the relationships have been, this will continue if the bonds are becoming weak everyday.

However, this would have been more better if they are the one that sold the barrel and it was deal on Rupees, it will means the country currency will appreciate and other companies that are working in India will have no choice but to do the same, they will source for rupees and indirectly gives more value in the country. Though, that's if the citizens are not over dependent on USD to import goods in the country.

No! Why? Simple, let's go back in time a bit:

March 8, 2023
India's oil deals with Russia dent decades-old dollar dominance
https://www.reuters.com/markets/currencies/indias-oil-deals-with-russia-dent-decades-old-dollar-dominance-2023-03-08/

then a bit later:
May 4, 2023
India, Russia suspend negotiations to settle trade in rupees
https://www.reuters.com/markets/currencies/india-russia-suspend-negotiations-settle-trade-rupees-sources-2023-05-04/

So, what happened?
Easily, the same thing that will happen in this case, or any other case, is the one that gets paid in rupee or ruble or other shitcoin will realize that is no way of buying anything else for that toilet paper except for the case it imports more stuff from that country, so unless you make a deal in which you buy 1 billion worth of oil and pay back one billion worth of products then nobody will take your toilet paper.
But if you trade 1 billion of merchandise for 1 billion of merchandise, then what's the point of using any currency when this is basic barter?

It's pretty simple, everyone tries to screw the other while claiming it's a fight against the world order or any other kind of bullshit!
Let me ask you, would you like to be paid in Bonobo coins rather than Bitcoin? Of course not, that's why every single deal in which you exchange Cottonelle to Scott toilet paper will end juts like the one above!

And btw, just the thought of the UAE dumping the dollar is hilarious!
You do know that the UAE dirham is pegged at a fixed value to......the $, right?  

The USD will not lose sleep over this, it's not a big deal. I saw this headline about 2 weeks ago, more so, the amount we are talking about is very small, and the terms and agreements that are attached to it are very much hidden. It's not the first time countries have had a bilateral agreement, however, one party pushes it for desperate reasons, and this desperation often, in turn, causes them to cheat themselves during negotiation.

We should also note that such like this is still a test of an outcome, it could work for them or not, and it's not the first time countries have tried such. It's a way to strengthen currency relevance between states, and economic and bilateral relationships between them as well.

Nonetheless, it has nothing to do with the USD dollar recognition or dominance whatsoever and the USD index will not even feel that anything happened. It has rather been strengthened since July, even amidst the transaction.