RBI-Maldives Monetary Authority Currency Agreement

On 21st November 2024, the Reserve Bank of India (RBI) and the Maldives Monetary Authority (MMA) signed an agreement in Mumbai to encourage the use of local currencies for cross-border transactions.

The Memorandum of Understanding (MoU), signed by RBI Governor and MMA Governor, aims to promote the use of Indian Rupee (INR) and Maldivian Rufiyaa (MVR) for current account transactions, capital account transactions, and other agreed economic exchanges.
The new framework allows exporters and importers to invoice and settle transactions in their respective domestic currencies, potentially fostering the development of the INR-MVR trading pair in the foreign exchange market.
The RBI highlighted that using local currencies for trade will help reduce transaction costs and settlement times, making the process more efficient for both nations.
This move is expected to deepen financial integration between India and the Maldives, enhancing bilateral trade and economic relations.