The RBI and BOM have signed a MoU to promote trade using INR and MUR for cross-border transactions. This will facilitate local currency payments, reduce costs, and enhance efficiency, strengthening economic ties between India and Mauritius.
In a notable development aimed at bolstering bilateral trade and financial collaboration, the Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have entered into a Memorandum of Understanding (MoU). This agreement facilitates the utilization of the Indian Rupee (INR) and the Mauritian Rupee (MUR) for cross-border transactions, thereby streamlining operations for exporters and importers by reducing costs and enhancing efficiency. It is anticipated that this initiative will fortify the economic and financial links between India and Mauritius.
The MoU was officially signed on March 12, 2025, in Port Louis, Mauritius, by RBI Governor Mr. Sanjay Malhotra and BOM Governor Mr. Rama Krishna Sithanen G.C.S.K. The event was attended by Indian Prime Minister Mr. Narendra Modi and Mauritian Prime Minister Mr. Navinchandra Ramgoolam, marking a significant occasion in the relationship between the two nations.
The primary objectives of the MoU include the promotion of the INR and MUR in bilateral trade and the facilitation of cross-border transactions using local currencies. It seeks to reduce reliance on third-party currencies, particularly the US Dollar, thus fostering a more localized trading environment.
The scope of this agreement encompasses all current account transactions and includes several capital account transactions with approval from both governments. This broader framework aims to facilitate a comprehensive approach to financial transactions between India and Mauritius.
Anticipated benefits of the MoU include optimized costs and expedited settlement times for cross-border trade, the establishment of a dedicated INR-MUR market enhancing currency liquidity, and a significant strengthening of financial integration between the two countries. Moreover, this agreement is poised to enhance trade relations, leveraging the historical and cultural connections shared by India and Mauritius.
The strategic importance of this initiative lies in its ability to deepen economic cooperation between India and Mauritius. It supports India’s vision of internationalizing the Rupee and aligns with broader regional financial integration efforts within the Indian Ocean region.
In conclusion, the signing of the MoU between the Reserve Bank of India and the Bank of Mauritius marks a significant advancement in promoting bilateral trade through the local currencies of INR and MUR. The initiative is expected to optimize operational efficiency, reduce currency dependence, and enhance economic ties between the two nations, contributing positively to their financial relationships and regional ambitions.
Original Source: currentaffairs.adda247.com
