The RBI and BOM signed an MoU promoting the use of INR and MUR for cross-border transactions, enhancing trade efficiency and reducing costs. The agreement, witnessed by Prime Ministers Modi and Ramgoolam, encompasses current and permissible capital transactions. This initiative is part of broader agreements stemming from Modi’s visit to Mauritius.
The Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have finalized a Memorandum of Understanding (MoU) to facilitate the use of Indian Rupee (INR) and Mauritian Rupee (MUR) in bilateral trade transactions. This agreement was officially signed by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G.C.S.K. during a ceremony attended by Prime Ministers Narendra Modi and Navinchandra Ramgoolam.
The MoU applies to all current account transactions and specific capital account transactions mutually agreed upon by both nations. This initiative aims to optimize cross-border trade by allowing exporters and importers to invoice and settle payments in their local currencies, thereby fostering the development of an INR-MUR market.
This currency cooperation is expected to lower transaction costs and accelerate payment settlements, thereby enhancing trade efficiency between India and Mauritius. The central bank highlighted that this collaboration signifies a pivotal development in enhancing bilateral relations, emphasizing the historical, cultural, and economic ties shared by the two countries.
Additionally, this MoU emerged from Prime Minister Modi’s visit to Mauritius, which included multiple agreements such as a credit facility deal between the Mauritian government and the State Bank of India. Agreements on SMEs and collaborative governance were also established. During this visit, Modi inaugurated various community projects and extended India’s support for building a new Parliament in Mauritius.
The signing of the MoU between the RBI and BOM marks a significant step toward enhancing bilateral trade by utilizing local currencies. This initiative is expected to streamline transactions, reduce costs, and fortify the economic ties between India and Mauritius, reflecting the commitment to deepen financial integration and cooperation. The visit of Prime Minister Modi further solidifies these relations through multiple agreements supporting various areas including governance and infrastructure.
Original Source: upstox.com
