RBI and Bank of Mauritius Strengthen Ties Through Local Currency Pact

The RBI and BOM have signed a pact to promote the use of INR and MUR for cross-border transactions. The MoU, signed by both governors, aims to facilitate bilateral trade and deepen financial integration between India and Mauritius, enabling transactions in local currencies, thus optimizing costs and settlement times.

The Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have established a framework that promotes the use of the Indian Rupee (INR) and the Mauritian Rupee (MUR) for cross-border transactions. This agreement, formalized through a Memorandum of Understanding (MoU), was signed by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G C S K in Port Louis, Mauritius on March 12, 2025.

The MoU aims to facilitate bilateral trade by allowing transactions in the domestic currencies of both nations. It encompasses all permissible current account transactions and certain capital account ones, as mutually agreed by the two countries. This initiative will empower exporters and importers to invoice and conduct payments in INR and MUR.

By promoting local currency use, the framework is expected to enhance market development in the INR-MUR pair, while also optimizing transaction costs and settlement times. The RBI emphasized that this collaboration signifies an important advancement in strengthening the cooperative relations between RBI and BOM.

The utilization of local currencies is anticipated to further boost trade between India and Mauritius, thereby deepening financial integration and reinforcing the longstanding historical, cultural, and economic ties between the two nations.

In conclusion, the framework established through the MoU between the RBI and BOM presents significant advantages for both India and Mauritius. By promoting the use of local currencies in bilateral trade, the initiative is expected to optimize transaction efficiency, deepen financial integration, and strengthen the nations’ robust ties. The MoU represents a notable milestone in enhancing cooperation between the two central banks.

Original Source: www.business-standard.com