Mumbai, Mar 18 (PTI) Reserve Bank and the Bank of Mauritius (BOM) have signed a pact for establishing a framework to promote the use of the Indian Rupee and the Mauritian Rupee (MUR) for cross-border transactions.

The Memorandum of Understanding (MoU) was signed by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G C S K, the central bank said in a statement on Tuesday.

"The MoU documents were exchanged in Port Louis, Mauritius in the presence of the Prime Minister of India Narendra Modi and Prime Minister of Mauritius Navinchandra Ramgoolam, on Wednesday, March 12, 2025," it said.

The RBI said the MoU aims to promote the use of INR and MUR in bilateral trade. The MoU covers all current account transactions and permissible capital account transactions as agreed upon by both the countries.

The framework would enable exporters and importers to invoice and pay in their respective domestic currencies, which in turn, would enable the development of a market in the INR-MUR pair.

Use of local currencies would optimise costs and settlement time for transactions.

"This collaboration marks a key milestone in strengthening bilateral cooperation between RBI and BOM," RBI said.

Use of local currencies in bilateral transactions will eventually contribute to promoting trade between India and Mauritius as well as deepen financial integration and strengthen the historical, cultural, and economic relations between India and Mauritius. PTI NKD HVA

Use of local currencies to settle bilateral trade enables invoicing in domestic currencies and fosters an INR MUR market. The MoU establishes a framework to promote use of the Indian Rupee and Mauritian Rupee in bilateral trade, covering all current account transactions and mutually agreed permissible capital account transactions, enabling exporters and importers to invoice and pay in domestic currencies, facilitating development of an INR MUR market pair and reducing transaction costs and settlement time to deepen financial integration.