The major reason why nations will be reluctant to make the Indian rupee a reserve currency is the limited exchange of INR.
The United States dollar (USD) has remained a global currency for more than 50 years. The greenback dominates the forex market with more than 60% of aggregate forex transactions and global forex reserves. However, the impact of key events, viz., the Russia-Ukraine war and the resulting spurt in commodity prices, likely recession in the US, coupled with the decadal high levels of inflation and shaking investor confidence in USD, have added steam to discussions on replacing the USD as a global currency.
The USD has ruled the global forex market for decades. This can be attributed to the strong growth in the US economy, dominating status in the world political stage and investor confidence developed in the greenback as most common medium of trade and reserve currency after the Bretton Woods…
