The RBI and BOM have signed a MoU to use INR and MUR for trade, reducing costs and fostering economic ties. Signed on March 12, 2025, the agreement allows for local currency transactions in bilateral trade, benefiting both nations economically and strategically.
The Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have entered into a Memorandum of Understanding (MoU) aimed at advancing bilateral trade and enhancing financial cooperation. This agreement allows for the utilization of the Indian Rupee (INR) and Mauritian Rupee (MUR) in cross-border transactions, thereby reducing costs and increasing efficiency in trade activities. The initiative is anticipated to fortify the economic and financial connections between India and Mauritius.
The MoU was executed by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G.C.S.K. on March 12, 2025, in Port Louis, Mauritius. The signing ceremony was graced by the presence of Indian Prime Minister Narendra Modi and Mauritian Prime Minister Navinchandra Ramgoolam, marking a significant diplomatic engagement between the two nations.
Main objectives of the MoU include promoting the use of INR and MUR in bilateral trade, facilitating payments in local currencies, and decreasing reliance on third-party currencies, such as the US Dollar. The scope of this agreement encompasses all current account transactions and includes capital account transactions that have been mutually agreed upon by both nations.
The expected benefits of this agreement are manifold, including optimized costs and expedited settlement times for cross-border trade. Additionally, the establishment of a market for INR-MUR pairing is expected to enhance currency liquidity. This initiative is not only anticipated to strengthen financial integration but also enhance trade relations, building on shared historical and cultural ties between India and Mauritius.
Strategically, this initiative significantly deepens economic cooperation between India and Mauritius and aligns with India’s broader vision of internationalizing the Indian Rupee. Moreover, it reinforces efforts aimed at regional financial integration across the Indian Ocean region, thus contributing to economic stability and growth.
The signing of the MoU between the Reserve Bank of India and the Bank of Mauritius represents a pivotal advancement in trade relations, facilitating the use of local currencies and enhancing bilateral economic cooperation. The agreement aims to optimize costs, improve transaction efficiency, and contribute to broader financial integration within the region.
Original Source: currentaffairs.adda247.com
