RBI and Bank of Mauritius Sign Pact to Use Local Currencies in Trade

The RBI and BOM have signed a pact to use local currencies for bilateral trade, enhancing transaction efficiency and solidifying ties between India and Mauritius.

The Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have entered into an agreement aimed at fostering the use of the Indian Rupee (INR) and the Mauritian Rupee (MUR) for cross-border trade. Officials Sanjay Malhotra, Governor of RBI, and Rama Krishna Sithanen G C S K, Governor of BOM, signed a Memorandum of Understanding (MoU) concerning this initiative.

The MoU, signed in Port Louis, Mauritius, occurred in the presence of Indian Prime Minister Narendra Modi and Mauritian Prime Minister Navinchandra Ramgoolam on March 12, 2025. This agreement intends to enhance the utility of both currencies in bilateral trade by encompassing all current account transactions and certain permissible capital account transactions.

Under this framework, exporters and importers will have the ability to invoice and complete payments in their respective domestic currencies. This proposal is expected to foster market development for the INR-MUR currency pair and ultimately optimize transaction costs and settlement times.

The RBI highlighted that this collaboration signifies a significant milestone in enhancing bilateral relations between the two central banks. The adoption of local currencies in trade is poised to boost commerce between India and Mauritius, thereby deepening financial integration and reinforcing their longstanding cultural and economic ties.

In summary, the agreement between the Reserve Bank of India and the Bank of Mauritius is a pivotal move towards promoting the use of local currencies for trade. This initiative is likely to optimize transaction efficiency and further solidify the financial integration between India and Mauritius, while enhancing their historical and cultural connections.

Original Source: www.business-standard.com