The RBI and the BOM have signed an MoU to promote trade in local currencies, enabling cross-border transactions in INR and MUR, aimed at reducing costs and enhancing financial cooperation. This agreement was signed in the presence of both Prime Ministers, signifying deepened bilateral relations and financial integration.
In a pivotal advancement for bilateral trade and financial collaboration, the Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have executed a Memorandum of Understanding (MoU) to facilitate the utilization of the Indian Rupee (INR) and the Mauritian Rupee (MUR) for cross-border transactions. This agreement allows exporters and importers to complete their transactions in their respective domestic currencies, which is anticipated to lead to decreased costs and improved efficiency, thereby fortifying economic and financial relations between India and Mauritius.
Key highlights of the MoU include its signing by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G.C.S.K. on March 12, 2025, in Port Louis, Mauritius. The exchange of documents was witnessed by Indian Prime Minister Narendra Modi and Mauritian Prime Minister Navinchandra Ramgoolam, marking a significant diplomatic event.
The objectives set forth in the MoU are to promote the use of INR and MUR in bilateral trade, facilitate cross-border transactions via local currency payments, and reduce reliance on third-party currencies, notably the US Dollar.
The scope of the MoU encompasses all current account transactions alongside permissible capital account transactions as mutually agreed upon by both countries. Such provisions aim to provide a robust framework for financial interactions.
Expected benefits from this initiative include optimized costs and expedited settlement times for cross-border trade. It is also anticipated to foster the development of an INR-MUR market, thereby enhancing currency liquidity. Overall, this will improve financial integration between India and Mauritius while bolstering trade relations, taking advantage of their historical and cultural connections.
Strategically, this initiative represents a deepening of economic cooperation between India and Mauritius. It advances India’s broader vision of internationalizing the Rupee and aligns with ongoing efforts for regional financial integration in the Indian Ocean region.
The recent MoU between the Reserve Bank of India and the Bank of Mauritius is a significant step towards promoting the use of local currencies in bilateral trade. By enhancing financial cooperation and reducing reliance on foreign currencies, this agreement is expected to have profound implications for trade efficiency, economic ties, and financial integration between the two nations. As such, it stands to positively influence the economic landscapes of both India and Mauritius going forward.
Original Source: currentaffairs.adda247.com
