RBI and Bank of Mauritius Formalize MoU to Enhance Local Currency Trade
The RBI and the Bank of Mauritius have signed a MoU to promote the use of local currencies in cross-border transactions, aiming to enhance bilateral trade and financial ties. By enabling transactions in Indian Rupees and Mauritian Rupees, the initiative seeks to reduce costs, improve efficiency, and strengthen economic relationships.
In a significant effort to bolster bilateral trade and financial cooperation, the Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have inked a Memorandum of Understanding (MoU) to facilitate transactions in local currencies. This agreement will allow the utilization of the Indian Rupee (INR) and the Mauritian Rupee (MUR) in cross-border transactions, thereby reducing costs and enhancing operational efficiency. The collaboration aims to solidify economic and financial relations between India and Mauritius.
Key Highlights of the MoU
1. Signing of the Agreement: The MoU was executed by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G.C.S.K. on March 12, 2025, in Port Louis, Mauritius, with the attendance of Indian Prime Minister Narendra Modi and Mauritian Prime Minister Navinchandra Ramgoolam.
2. Objectives of the MoU: The primary aims include promoting the use of INR and MUR for bilateral trade, facilitating cross-border transactions in local currencies, and decreasing reliance on third-party currencies such as the US Dollar.
3. Scope of Transactions: The agreement encompasses all current account transactions and includes certain permissible capital account transactions, as mutually agreed upon by both nations.
4. Expected Benefits: The MoU is anticipated to optimize transaction costs and reduce settlement time for cross-border trade. It aims to foster the development of an INR-MUR market to enhance currency liquidity while strengthening financial integration between India and Mauritius.
5. Strategic Importance: This initiative is expected to significantly deepen economic collaboration between the two countries and aligns with India’s broader vision of internationalizing the Rupee. Furthermore, it supports efforts for regional financial integration in the Indian Ocean area.
The signing of the MoU between the Reserve Bank of India and the Bank of Mauritius marks a pivotal step in enhancing bilateral trade and financial relations. By promoting the use of local currencies in trade, the agreement aims to reduce transaction costs and improve efficiency, leading to increased financial integration. This strategic partnership is set to bolster the economic ties and foster growth between the two nations.
Original Source: currentaffairs.adda247.com
