The RBI and BOM have signed an MoU to promote the use of the INR and MUR in bilateral trade, allowing transactions in local currencies. The agreement aims to optimize costs and settlement times. It enhances economic cooperation and strengthens ties between India and Mauritius.
The Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have entered into a Memorandum of Understanding (MoU) aimed at establishing a framework for the use of local currencies in bilateral trade. The agreement was signed by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G C S K. The signing took place in Port Louis, Mauritius, with the presence of India’s Prime Minister Narendra Modi and Mauritius’ Prime Minister Navinchandra Ramgoolam on March 12, 2025.
The primary goal of this MoU is to promote the use of the Indian Rupee (INR) and the Mauritian Rupee (MUR) in cross-border transactions. It encompasses all current account transactions and permissible capital account transactions as defined by both nations. This framework allows exporters and importers from both countries to invoice and settle payments in their respective domestic currencies, promoting the development of a market for the INR-MUR currency pair.
Efficiency is a critical advantage of using local currencies, as it optimizes costs and reduces transaction settlement times. RBI emphasizes that this collaboration marks a significant milestone in enhancing bilateral relations between the two central banks. Furthermore, utilizing local currencies in trade is expected to bolster economic ties, deepen financial integration, and strengthen the long-standing historical and cultural connections between India and Mauritius.
The signing of the MoU between the RBI and BOM signifies a pivotal step toward enhancing trade between India and Mauritius. By promoting local currencies for transactions, the agreement aims to reduce costs and settlement times, fostering better economic cooperation. This framework not only supports bilateral trade but also reinforces the historical and cultural bonds shared between the two nations.
Original Source: www.business-standard.com
