Mumbai: The Reserve Bank of India has inked an agreement with the Maldives Monetary Authority for promoting local currencies in carrying out bilateral transactions, according to an official statement. As part of the MoU, the Indian rupee and the Maldivian Rufiyaa will be used to settle cross-border transactions. RBI governor Shaktikanta Das signed the agreement with MMA governor Ahmed Munawar.
Transactions eligible for INR-MVR payment
Capital market transactions and current account transactions will be eligible for INR-MVR payments, according to the statement. Further, any financial and economic transactions that are agreed upon by the 2 sides will be eligible for such payments. Exporters and importers will be able to raise invoices and settle the same in their domestic currency going forward. This will promote INR-MVR pair trading in the foreign exchange market.
Reserve Bank of India and Maldives Monetary Authority Sign Memorandum of Understanding (MoU) to Promote Use of Local Currencies for Bilateral Transactions
— ReserveBankOfIndia (@RBI) November 21, 2024
Currently, each currency is indexed to the US dollar, which makes it time-consuming and more expensive when it comes to making real-time payments. INR-MVR currency trade will ultimately encourage bilateral trade between the two countries, the RBI said.
This is a developing story. More to follow
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