India and UAE decides to stop trading in US Dollar, to boost local currencies

Abu Dhabi – India and UAE have made a mutual currency swap agreement on Tuesday to trade in their local currencies to avoid dependency on US dollar.

According to the Indian Embassy in Abu Dhabi, the swap agreement is for an amount of two billion UAE dirham equivalent to 35 billion Indian rupees.

“The bilateral currency swap agreement between India and UAE is expected to reduce the dependency on hard currencies like the US dollar,” the embassy said.

“It is also expected to give a push for the local currencies of the two nations and may reduce the impact of volatility in exchange rate arising from the dependency on a third currency. It is also expected to reduce the transmission costs arising from exchange rate risk,” the embassy added.

They also discussed agreements on energy, security, trade, investments, space, defense and so on.

India and UAE has a bilateral trade of $50 billion, while UAE is the sixth-largest oil exporter to India.

Earlier this year, Adnoc – Abu Dhabi National Oil Company and India’s ONGC – Oil and Natural Gas Corporation has signed a 10 per cent offshore concession agreement which gives Indian oil companies opportunity to produce about 1.4 million barrels of oil per day for UAE.

Adnoc along with Saudi Aramco will be investing in India’s Ratnagiri Petrochemical complex worth $44 billion.