A US Federal Reserve official's reiteration about continuing interest rate hikes to control inflation hit the dollar, giving some relief to the Rupee which gained 6 paise in value. The domestic currency opened at 81.56 against the US dollar as global market sentiment remained mixed over latest assertions. The Rupee tracks the strength and weakness of the US dollar, since most of the commodities flowing in and out of India are paid for in dollars.
To change this, India has already started rupee trading with Russia, where it gets to pay for oil in the domestic currency, and is working on a similar deal with Saudi Arabia. The internationalisation of the Rupee can significantly cut down the dependence on the US dollar, which decides the value of most currencies globally. But the softness of the Rupee hasn't done much for the Pound Sterling, which has dropped in value due to an unimpressive budget in the UK.
