RBI and Bank of Mauritius Establish MoU for Local Currencies in Transactions
The RBI and BOM have signed a MoU to use the INR and MUR in cross-border transactions. The agreement, signed by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen, covers current and permissible capital account transactions. It aims to lower transaction costs and strengthen economic ties between India and Mauritius, while also being part of a broader set of agreements made during Modi’s visit to Mauritius.
The Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have formally signed a Memorandum of Understanding (MoU) aimed at facilitating the use of local currencies, specifically the Indian Rupee (INR) and the Mauritian Rupee (MUR), for cross-border transactions. This agreement was finalized by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G.C.S.K, in the presence of notable dignitaries including Prime Minister Narendra Modi and Mauritian Prime Minister Navinchandra Ramgoolam.
The MoU encompasses all current account transactions and approved capital account transactions as per the mutual understanding between the two nations. This initiative allows exporters and importers to invoice and settle payments in their domestic currencies, which is expected to pave the way for the development of a trading market between the INR and the MUR.
Additionally, the agreement is anticipated to lower transaction costs and reduce settlement times, enhancing the efficiency of cross-border trade practices. The RBI emphasized that this collaboration signifies a significant advancement in bolstering the bilateral relations between the two nations. Furthermore, it is expected to promote trade relations and deepen financial integration, thus reinforcing the historical, cultural, and economic ties between India and Mauritius.
This MoU was part of a broader series of agreements made during Prime Minister Modi’s visit to Mauritius, which included the signing of a credit facility deal with the State Bank of India, and an MoU focusing on India’s Ministry of Micro, Small, and Medium Enterprises and Mauritius’ Ministry of Industry, SME, and Cooperatives. Other notable agreements include commitments to governance cooperation, maritime information sharing, and collaboration in preventing financial crimes.
During his visit, Prime Minister Modi also inaugurated several projects including the Atal Bihari Vajpayee Institute of Public Service and Innovation, and a new health center at Cap Malheureux, along with 20 High Impact Community Development Projects. Moreover, he presented a navigational chart of St Brandon Island, prepared by the Indian Navy, and announced India’s assistance in building a new Parliament in Mauritius alongside the second phase of the HICDP initiative.
In conclusion, the signing of the MoU between the RBI and BOM represents a pivotal step towards enhancing economic cooperation through the usage of local currencies in bilateral transactions. This initiative is expected to promote trade, reduce transaction costs, and strengthen the already robust ties between India and Mauritius. It aligns with several other strategic agreements established during Prime Minister Modi’s visit to Mauritius, all aimed at furthering mutual growth and cooperation.
Original Source: upstox.com
