Kotak Mahindra Bank’s MD and CEO, Uday Kotak, made a significant remark against the US dollar on Friday. At a panel discussion for the ET Awards for Corporate Excellence 2023, he referred to the dollar as “the biggest financial terrorist in the world.”
He said, “all our money is in nostro accounts and somebody in the US can say- you cannot withdraw it from tomorrow morning- and you are stuck. That is the power of the reserve currency. I think we are at a crucial time in the world history where the world is desperately looking for an alternative reserve currency.”
He contrasted this dire condition with the current situation, in which the world is frantically searching for an alternative reserve currency, and emphasized a significant, once-in-a-hundred-years, chance for India to become the world’s reserve currency by using the Indian Rupee.
“I don’t think Europe can make their currency the reserve, because it is the disunited states of Europe. I don’t think UK or Japan have the heft to be taking that position, though both the British Pound and the Yen are free currencies. China, I think, has a major issue of trust with many many countries around the world,” he said.
Kotak continued by outlining the conditions that India must meet in order to establish the rupee as a reserve currency. He said, “It is a long, sustained walk and run,” noting that the nation “must create strong institutions.” It must provide a solid foundation that is independent of everyone’s whims and inclinations. India must be believed, he affirmed.
However, within 24 hours, Kotak corrected himself.
In a tweet, he said, “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.”
Note: Report updated with his clarification tweet.