The RBI and BOM have signed a MoU to use the Indian Rupee and Mauritian Rupee for trade, enhancing bilateral cooperation, reducing costs, and facilitating local currency transactions.
The Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have undertaken a pivotal step toward enhancing economic collaboration by signing a Memorandum of Understanding (MoU). This agreement is aimed at facilitating trade through the use of the Indian Rupee (INR) and the Mauritian Rupee (MUR) in cross-border transactions, ultimately reducing costs and increasing transaction efficiency between both nations.
The MoU was formally signed by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G.C.S.K. on March 12, 2025, in Port Louis, Mauritius, with notable presence from Indian Prime Minister Narendra Modi and Mauritian Prime Minister Navinchandra Ramgoolam.
This agreement seeks to encourage the utilization of INR and MUR for bilateral trade, while also enabling cross-border transactions in local currencies and minimizing reliance on third-party currencies like the US Dollar.
The agreement encompasses all current account transactions and includes permissible capital account transactions as mutually agreed upon by both countries. The anticipated outcomes include optimized costs, expedited settlement times for trade, and the establishment of a robust INR-MUR market that enhances currency liquidity.
The strategic significance of this MoU is profound, as it reinforces financial integration between India and Mauritius and supports an overarching goal of internationalizing the Indian Rupee. It is also aligned with broader regional financial integration initiatives in the Indian Ocean area.
The signing of the MoU between the Reserve Bank of India and the Bank of Mauritius marks a significant advancement in strengthening bilateral trade relations. By promoting the use of local currencies, the agreement aims to enhance transaction efficiency, reduce costs, and deepen economic integration, contributing to a stronger partnership between India and Mauritius.
Original Source: currentaffairs.adda247.com
