Rupee-renminbi trade on cards to reduce deficit and strengthen rupee

An agreement with China to trade through native currencies of both nations, doing away with the US dollar, a barter mechanism to buy crude oil from Iran and Russia, as well as further monetisation of domestic gold assets are among ways the Centre hopes to reduce the trade deficit and strengthen the rupee.

An inter-ministerial meeting, chaired by Commerce and Industry Minister Suresh Prabhu on Thursday, saw these suggestions from a host of ministries including finance, coal, petroleum, electronics, and mines and power, among others. They will now draw up short-term measures — within the next three months — to reduce dependence on imports and ramp up domestic production capacity.

Prabhu has also asked them to also create long-term plans to cut down on the widening current account deficit, mostly fueled by a lopsided trade balanc