In a significant effort to enhance trade and financial cooperation, the Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have signed a Memorandum of Understanding (MoU). This agreement will allow the use of the Indian Rupee (INR) and the Mauritian Rupee (MUR) for cross-border transactions. By letting exporters and importers settle their transactions in their own currencies, it aims to reduce costs and improve efficiency. This initiative is expected to fortify the economic and financial connections between India and Mauritius.
Key Highlights of the MoU
1. Signing of the Agreement
• The Memorandum of Understanding was signed by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G.C.S.K.
• The exchange of documents took place on March 12, 2025, in Port Louis, Mauritius, with Indian Prime Minister Narendra Modi and Mauritian Prime Minister Navinchandra Ramgoolam in attendance.
2. Objectives of the MoU
- Promote the use of INR and MUR in bilateral trade.
- Facilitate cross-border transactions by allowing payments in local currencies.
- Reduce dependence on third-party currencies, such as the US Dollar.
3. Scope of Transactions
- Covers all current account transactions.
- Includes permissible capital account transactions agreed upon by both countries.
4. Expected Benefits
- Optimized costs and faster settlement time for cross-border trade.
- Development of an INR-MUR market, boosting currency liquidity.
- Strengthened financial integration between India and Mauritius.
- Enhanced trade relations, leveraging historical and cultural ties.
5. Strategic Importance
- This initiative deepens economic cooperation between the two nations.
- Supports India’s broader vision of internationalizing the Rupee.
- Aligns with regional financial integration efforts in the Indian Ocean region.
