Maldives, India to settle trade in local currencies
The RBI, in a circular issued on Monday, stated that the new trade settlement mechanism is effective immediately.
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The Reserve Bank of India (RBI) has announced that bilateral trade transactions between India and the Maldives may now be settled in Indian Rupees (INR) and/or Maldivian Rufiyaa (MVR) in addition to the existing Asian Clearing Union (ACU) mechanism.
The ACU is a payment arrangement that allows participating central banks and monetary authorities to settle intra-regional transactions on a net multilateral basis. Its members include Bangladesh, Belarus, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka.
The decision follows the signing of a Memorandum of Understanding (MoU) between the RBI and the Maldives Monetary Authority in November 2024. The agreement establishes a framework to facilitate trade settlements in local currencies.
The RBI, in a circular issued on Monday, stated that the new trade settlement mechanism is effective immediately.
