The RBI and BOM have signed an MoU to utilize local currencies for transactions, enabling exporters and importers to settle payments in INR and MUR. This agreement aims to reduce costs and expedite trade processes, bolstering India-Mauritius relations across various sectors.
The Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have entered into a Memorandum of Understanding (MoU) aimed at promoting the utilization of the Indian Rupee (INR) and the Mauritian Rupee (MUR) for cross-border transactions. The MoU was officially signed by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G.C.S.K in the presence of Prime Minister Narendra Modi and Mauritian Prime Minister Navinchandra Ramgoolam.
This agreement encompasses all current account transactions and any capital account transactions that are mutually permissible between the two nations. The new framework will enable exporters and importers to conduct invoicing and payment settlements in their respective local currencies, thereby fostering the development of a dedicated INR-MUR market.
The adoption of local currencies is anticipated to lower transaction costs and expedite settlement times, leading to enhanced efficiency in cross-border trade. The central bank emphasized that this collaboration is a significant milestone in bolstering bilateral cooperation between India and Mauritius.
The agreement also aims to promote bilateral trade and deepen financial integration while strengthening the historical, cultural, and economic ties between the two countries. This initiative coincided with Prime Minister Modi’s visit to Mauritius, during which multiple other agreements were signed, including a credit facility deal with the State Bank of India and an MoU between key ministries of both nations. Modi also inaugurated several projects during the visit, including the Atal Bihari Vajpayee Institute of Public Service and Innovation.
The signing of the MoU between the RBI and BOM marks a pivotal step in enhancing bilateral relations through the promotion of local currencies for trade transactions. This initiative is expected to streamline processes, reduce costs, and foster deeper economic ties between India and Mauritius. The agreements formed during Prime Minister Modi’s visit further illustrate the commitment to strengthening these relationships across various sectors.
Original Source: upstox.com
