The RBI and BOM signed a MoU to promote transactions in INR and MUR, covering current and permissible capital account transactions. This agreement aims to reduce transaction costs and improve trade efficiency. It aligns with broader cooperation efforts initiated during Prime Minister Modi’s visit to Mauritius.
The Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have formalized a framework aimed at facilitating cross-border transactions using the Indian Rupee (INR) and the Mauritian Rupee (MUR). This framework was established through a Memorandum of Understanding (MoU) signed by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G.C.S.K. The signing took place in the presence of Indian Prime Minister Narendra Modi and Mauritian Prime Minister Navinchandra Ramgoolam.
The MoU encompasses all current account transactions and any permissible capital account transactions agreed upon by both nations. By enabling exporters and importers to transact in their respective domestic currencies, this initiative is anticipated to cultivate a dedicated INR-MUR market.
Moreover, adopting local currencies aims to decrease transaction costs and enhance settlement times, thereby optimizing the processes surrounding cross-border trade. The RBI has highlighted that this important collaboration signifies a milestone in bolstering bilateral relations between India and Mauritius.
In addition to the currency agreement, Prime Minister Modi’s recent visit to Mauritius resulted in various other treaties, including a credit facility agreement with the State Bank of India, and an MoU between India’s Ministry of Micro, Small and Medium Enterprises and Mauritius’ counterparts. Further discussions also covered governance cooperation, maritime information exchange, and measures against financial crime.
Mr. Modi inaugurated the Atal Bihari Vajpayee Institute of Public Service and Innovation, alongside a new health center at Cap Malheureux and 20 High Impact Community Development Projects (HICDP). He also provided a navigational chart of St Brandon Island from the Indian Navy and pledged resources for constructing a new Parliament Building in Mauritius as part of the continued HICDP initiative.
In summary, the RBI and BOM have established a significant agreement to enhance bilateral trade by utilizing local currencies for transactions, which is expected to streamline cross-border trade and promote deeper financial connections. The agreements formed during Prime Minister Modi’s visit further strengthen ties and cover various cooperative initiatives, demonstrating a commitment to mutual development between India and Mauritius.
Original Source: upstox.com
