Tuesday, October 3, 2023

UAE & India to Start Trade Settlement in Local Currencies

The Central Bank of the UAE and the Reserve Bank of India have taken a step towards strengthening trade relations between the two nations. The CBUAE and RBI signed two Memoranda of Understanding (MoUs) in the presence of UAE’s President and India’s Prime Minister. These agreements will support the rapid growth of trade between both countries.

The first MoU establishes a framework for trade transactions in UAE dirham and Indian rupee. It allows eligible transactions, opening of correspondent accounts, direct exchange rates, and liquidity management as per their laws.

Through the second MoU, participants can benefit from instant payment platforms and local payment card schemes in both UAE and India. The integration of these systems will ensure compliance with regulatory requirements in both countries. The collaboration also explores the possibility of linking their respective financial messaging systems. Moreover, it will further enhance cross border payments efficiency.

Furthermore, Governor Khaled Mohamed Balama of CBUAE stated that:

These Memoranda of Understanding lay a strong foundation for enhancing cooperation across the financial sector, fostering more trade and investment between the two nations.”

The focus will be on driving innovation in the financial technology space and making cross border payments more efficient.

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