India and Russia are planning to discuss the possibility of creating a new rupee-ruble currency market, which will be based on a dynamic reference exchange rate. The initiative is aimed at addressing the problem of "hovering rupees" and circumventing trade restrictions caused by U.S. sanctions.

According to an Economic Times article, discussions on the issue, as well as the idea of setting up a payment confirmation mechanism, are scheduled to be discussed at a meeting of senior regulators and commercial banks from the two countries in Moscow this week.

Currently, banks involved in export-import transactions between India and Russia have to use dollars for currency conversion, which involves two transactions: rupees are first exchanged for dollars and then dollars for rubles. However, in the face of sanctions, such settlements are becoming less accessible and more complicated.

The creation of a rupee-ruble reference exchange rate should simplify foreign exchange transactions, reduce dependence on the dollar, and provide a more stable basis for trade between India and Russia.

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