Settlement of Bilateral trade transactions between India and the Maldives will be allowed in local currencies of Indian Rupees and Maldivian Rufiyaa in addition to the existing Asian Clearing Union mechanism. Media reports in the Maldives have highlighted that the Reserve Bank of India (RBI) has issued a circular in this regard on Monday. The initiative is expected to help Maldives in a big manner as India is the largest trade partner of Maldives with the bilateral trade exceeding 548 million US Dollars.
The decision follows the signing of a Memorandum of Understanding between the RBI and the Maldives Monetary Authority (MMA) in November last year. The agreement establishes a framework to facilitate trade settlements in local currencies. The MMA had noted that the initiative marks a significant step forward in enhancing trade and financial ties between the Maldives and India.
