For ordinary people, they may not be aware of the importance of their country's currency in the international arena, but every country is certainly very clear when conducting trade and particularly hopes to use their own currency.
However, in the current international situation, not all countries' currencies can be used for transactions, and consensus needs to be reached. For example, there are currency settlement issues between India and Russia, so what are the problems between the two countries?
Currency Dispute between India and Russia
When it comes to India and Russia, although they are not particularly friendly countries, they are not hostile countries. There is a certain amount of trade between the two countries, including oil trade.
Due to Russia's high reserves in oil, there are oil trade exchanges with many countries, including India.
The reason for the currency dispute between the two countries is actually due to the fact that after Russian oil arrived in India, India was unwilling to use RMB for payment, and Russia did not accept it. This led to a dispute, resulting in at least seven batches of oil from Russia waiting for payment.
Although India has made concessions in this matter and is preparing to use the UAE currency, Russia still does not accept the insistence that India use the Chinese yuan to complete the payment of seven batches of oil.
In this situation, as long as one party does not compromise, payment cannot be made on time, which will definitely have a certain impact on Russia.
Why is there a currency dispute?
There is certainly a reason for the currency dispute between India and Russia, which is likely due to India's lack of trust in China and its unwillingness to use the Chinese yuan for transactions.
After all, the cooperation between India and Russia has been particularly long, with cooperation in many fields. If there are so many batches of oil from Russia that cannot be paid in a timely manner, it will definitely affect the future cooperation.
From Russia's attitude, it can be seen that even if they have 7 batches of oil and cannot pay, they can still insist on using RMB for settlement, which is enough to prove that Russia's attitude is very firm. Now it only depends on how India chooses.
Another reason is that India also has a very large demand for oil, and it needs to import oil from Russia and other places every year. However, if this compromise is made, it is estimated that the Chinese yuan will also need to be used for future transactions.
This situation is something India does not want to see. As we all know, India has always been hostile towards China. Whether it is the problems that arise in border areas or other places, India wants to compare with China, so it is not willing to let the RMB become a choice for many countries in international trade.
If you want to solve the currency dispute between the two countries, it is not actually a very difficult thing. It only requires mutual consultation, more dialogue, and when conducting various cooperation, the common ideas of the two sides should prevail.
On the challenges faced by currency
It should be noted that at the beginning, people used the US dollar the most for various trade transactions. In this situation, in addition to making the US dollar particularly popular, the United States also gained significant international status in this situation.
But with the turbulence of the situation and the actions of the United States, it can be known that there are certain risks if the world uses a single currency for trade transactions. So now many countries hope to use their own currencies or promote currency diversification in international trade transactions.
When doing so, it will be discovered that there are settlement and exchange issues between different countries' currencies, as well as exchange rate fluctuations between currencies. Therefore, choosing a currency with relatively low volatility is of course the best choice, as it will not cause losses to oneself due to the high volatility of the currency used during trading.
The reason why Russia chose the RMB for settlement is clearly a trust in China. After all, in many countries, besides the United States, China's economic strength is also very huge. With the decline of the US dollar, the RMB has also been greatly improved.
So for China, of course, it also hopes that its RMB can be used in international trade transactions. Only when many countries use the RMB can it become more valuable and important.
Conclusion:
Through the fact that there are 7 batches of Russian oil waiting for payment, it can be seen that Russia has made a lot of efforts to enable India to use the Chinese yuan in settlement, but India does not accept Russia's request.
No matter why India is unwilling to use the Chinese yuan for trading, I believe this matter will always be resolved, because Russia will definitely not allow its oil to be given to other countries for nothing. I don't know what the final outcome will be?