multi currency settlements only really work when there is also a balance of trade and it sounds like there is an imbalance

-so russia would end up with a bunch of rupees (by selling inda oil and getting rupees) that no one wants

-and then if Russia doesn't buy anything from india it can never use it's new stack of rupees so it just sits in a bank.

-however if they used dollars for trade then they could take those dollars (from sale of oil to india) and buy goods from other counties with those dollars.

this is why a neutral and global currency is so good for frictionless trade.

and this multi currency situation is also why there will never be a situation that zoltan describes. there will be too many issues with trade imbalances causing currency imbalances. and this is why the world uses one currency essentially (the dollar)

The link for this post is using an archive for the article on The Economic Times' website. An archive has no paywall, no subscription requirement, and can be easier to read. The original article, on The Economic Times' website is:

https://economictimes.indiatimes.com/news/economy/foreign-trade/indias-rupee-trade-plans-with-russia-has-likely-run-into-trouble/articleshow/97901787.cms [12ft proxy]

Dirty deeds done dirt cheap