RBI and Bank of Mauritius Memorandum of Understanding to Promote Local Currency Trade

The Reserve Bank of India and the Bank of Mauritius signed a MoU to facilitate trade using local currencies, specifically the INR and MUR. This agreement, effective from March 12, 2025, aims to reduce costs, improve efficiency, and strengthen economic ties between the two nations. Key benefits include optimized costs, faster settlements, and enhanced trade relations.

In a pivotal decision to bolster bilateral trade and financial collaboration, the Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have executed a Memorandum of Understanding (MoU). This agreement allows the utilization of the Indian Rupee (INR) and the Mauritian Rupee (MUR) for cross-border trading, which is anticipated to minimize costs and enhance transaction efficiency. The initiative aims to fortify the economic and financial relationship between India and Mauritius.

The MoU was officially signed by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G.C.S.K. on March 12, 2025, in Port Louis, Mauritius. This important moment was witnessed by both Indian Prime Minister Narendra Modi and Mauritian Prime Minister Navinchandra Ramgoolam, showcasing the high-level support for the initiative.

Among the key aims of the MoU are the encouragement of INR and MUR usage in bilateral trade while facilitating cross-border transactions. This agreement seeks to diminish reliance on intermediary currencies like the US Dollar, providing a more economical and efficient avenue for trade.

The MoU encompasses all current account transactions and includes permissible capital account transactions mutually agreed upon by both nations. This expanded scope broadens the possibilities for economic interactions between India and Mauritius.

Additionally, the anticipated benefits from this agreement include optimized costs and expedited transaction settlements for cross-border trade, the development of an INR-MUR market which could enhance currency liquidity, and strengthened financial integration. This approach is designed to leverage the historical and cultural connections shared by the nations to enhance their trade relations.

Strategically, this initiative is seen as a means of intensifying economic cooperation while contributing to India’s objective of promoting the internationalization of the Rupee. Furthermore, it aligns with broader financial integration strategies within the Indian Ocean region.

In summary, the signing of the MoU between RBI and BOM represents a significant step towards enhancing trade using local currencies, which is expected to yield numerous economic benefits and strengthen bilateral ties between India and Mauritius.

The Memorandum of Understanding signed between the Reserve Bank of India and the Bank of Mauritius marks a significant step in promoting trade in local currencies between the two nations. The initiative aims to optimize transaction costs, improve settlement efficiency, and leverage historical ties for enhanced economic cooperation. This agreement not only fosters bilateral trade but also supports India’s vision of internationalizing the Rupee and aligns with broader regional financial integration efforts.

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