RBI - Maldives Sign MoU to Promote Use of Local Currencies for Bilateral Transactions

The Reserve Bank of India (RBI) and the Maldives Monetary Authority (MMA) signed a Memorandum of Understanding (MoU) in Mumbai for establishing a framework to promote the use of local currencies viz., the Indian Rupee (INR) and the Maldivian Rufiyaa (MVR) for bilateral transactions.

RBI - Maldives Sign MoU to Promote Use of Local Currencies for Bilateral Transactions

RBI, MMA Sign MoU to Promote Use of Local Currencies for Cross-Border Transactions

The Reserve Bank of India (RBI) and the Maldives Monetary Authority (MMA) signed a Memorandum of Understanding (MoU) to promote the use of local currencies viz., the Indian Rupee (INR) and the Maldivian Rufiyaa (MVR) for cross-border transactions.

Read Also: RBI imposes Rs.61.40 lakh penalty on RBL Bank

The MoU Signs By

The MoU was signed by the Governor, Reserve Bank of India Shaktikanta Das and the Governor, Maldives Monetary Authority Ahmed Munawar.

Key Highlights

The RBI and Maldives Monetary Authority MoU encourages the use of INR and MVR in current account transactions, permissible capital account transactions and any other economic and financial transactions as agreed upon by both countries. 

Read Also: RBI signs Currency Swap Agreement with Maldives Monetary Authority

This framework would enable exporters and importers to invoice and settle in their respective domestic currencies, which in turn would enable the development of trading in INR-MVR pairs in foreign exchange market. Use of local currencies would optimise costs and settlement time for transactions.

Use of Local Currencies for Bilateral Transactions collaboration marks a key milestone in strengthening bilateral cooperation between RBI and MMA.

Use of local currencies for cross-border transactions will eventually contribute to promoting trade between India and Maldives as well as deepen financial integration and strengthen the economic relations between India and Maldives.

Static Current Affairs related to Maldives for upcoming exams

• Capital city: Malé
• Largest city: Malé
• Official language and national language: Dhivehi
• Common languages: English
• President: Mohamed Muizzu
• Vice President: Hussain Mohamed Latheef
• Total Population 2022 census: 515,132 (167th)
• Currency: Maldivian rufiyaa (MVR)