Uday Kotak Terms US Dollar 'Biggest Financial Terrorist', Clarifies Later

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New Delhi: On Sunday, Kotak Mahindra Bank CEO Uday Kotak reiterated his comments in which he called the dollar the biggest "financial terrorist" in the world. Kotak clarified his meaning in a tweet, writing that "a reserve currency has disproportionate power, whether it is nostro accounts, 500 bps rate increase," or emerging countries keeping dollars for liquidity.

He clarified in a tweet that he was alluding to the excessive influence that a reserve currency possesses. According to Kotak, the US Dollar's status as a reserve currency provides it the power to regulate international trade, potentially placing other nations in a dependent position.

"In a recent discussion on US$, I inadvertently used the words “financial terrorist” which I would like to correct. What I meant was that a reserve currency has disproportionate power, whether it is nostro account, 500 bps rate increase, or emerging countries holding $ for liquidity," Uday Kotak tweeted. ()

A reserve currency has the authority to control the funds in nostro accounts, and someone in the US can decide whether or not they can be withdrawn, according to Kotak Mahindra Bank CEO. ()

He asserted that the search for a new reserve currency is now underway and that India has the chance to establish the Indian Rupee as the global reserve currency.

Kotak stated during his speech at the ET Awards for Corporate Excellence 2023 that he thinks the world is searching for a new reserve currency at this crucial juncture in history. He claimed that other nations, including Europe, the UK, Japan, and China, lacked the prerequisites for designating their currencies as reserve currencies. 

In order to establish the Rupee as a reserve currency, Kotak underlined that India needs to concentrate on creating strong institutions and a framework that is independent of the whims of others.

It would take around 10 years to accomplish this goal, according to Kotak, and India needs gain the confidence of other nations in order to make the Rupee the reserve currency.