Media Release: The Bank of Mauritius and the Reserve Bank of India sign Memorandum of Understanding for the establishment of a framework to promote the use of Mauritian and Indian currencies for cross-border transactions

 

In the context of the visit of the Honourable Prime Minister of the Republic of India, the Bank of Mauritius and the Reserve Bank of India have signed and exchanged a Memorandum of Understanding (MoU) for the setting up of a framework for cooperation to use Mauritian Rupee (MUR) and Indian Rupee (INR) for trade settlements between Mauritius and India.

 

The MoU will culminate in the implementation of the INR-MUR Local Currency Settlement (LCS) System to reduce dependency on hard currencies for cross-border transactions. The LCS will help Mauritius and India further develop their respective exchange markets and facilitate bilateral trade and settlement, direct investment, remittances, financial market development, economic growth and stability. The LCS will promote the use of the INR and MUR for all current account transactions and permissible capital account transactions between India and Mauritius.

 

The MoU also provides for cooperation to create an INR Clearing Centre in Mauritius, and the inclusion of the INR as a settlement currency in the Mauritius Automated Clearing and Settlement System. As such, commercial banks would be able to hold an account in INR at the Bank of Mauritius for transactions in INR. 

 

The INR clearing Centre will ultimately be extended to the Common Market for Eastern and Southern Africa’s Regional Payment and Settlement System (COMESA), for which the Bank of Mauritius is the settlement bank. It is proposed that the INR be included as a settlement currency. This initiative will promote Mauritius as a jurisdiction for clearing and settlement in INR on the continent.

 

Further to the signing of the MoU, Bank of Mauritius Governor Dr Rama Krishna Sithanen stated: "The establishment of a framework for settlement in Mauritian and Indian currencies, and the creation of an INR Clearing Centre will undoubtedly benefit both Mauritius and India. This will bolster trade and investment between the two countries while mitigating volatility and other foreign currency risks.”