RBI says India-Maldives trade can be settled in rupees, Maldivian Rufiyaa
This story was originally published at 19:06 IST on 17 March 2025
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--RBI: India-Maldives trade can be settled via rupee or Maldivian Rufiyaa
NEW DELHI – The Reserve Bank of India on Monday said trade between India and Maldives can be settled in the local currencies of the two countries in addition to the Asian Clearing Union mechanism. The local currency settlement system is effective immediately, the Indian central bank said in a notification.
The announcement comes after the RBI and the Maldives Monetary Authority signed a memorandum of understanding in November to establish a framework to promote the use of local currencies for cross-border transactions. As per the RBI statement on Nov. 21, the MoU "encourages the use of INR (Indian rupee) and MVR (Maldivian Rufiyaa) in current account transactions, permissible capital account transactions and any other economic and financial transactions as agreed upon by both countries". The use of local currencies "would optimise costs and settlement time for transactions", the RBI had said.
In 2023-24 (Apr-Mar), total trade between India and Maldives was $978.53 million, with India enjoying a surplus of $805.25 million.
The settlement of trade in local currencies with the Maldives is the latest such mechanism announced by India, which has been looking to do more international transactions in rupees as opposed to US dollars and other foreign currencies. US President Donald Trump has warned repeatedly that any attempt by countries part of the BRICS bloc, which includes India, "to move away from the Dollar" will result in 100% tariffs. However, India has said it is not pursuing a de-dollarisation strategy.
The RBI introduced its framework to settle international trade in Indian rupees in July 2022. End
US$1 = INR 86.80
Reported by Siddharth Upasani
Edited by Saji George Titus
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