Business

Trade Settlement Between India and Malaysia is Now Possible In Indian Rupee

Trade in Indian Rupee: Besides the existing methods of settlement in other currencies, trade between India and Malaysia can now be settled in Indian Rupee (INR). The decision comes after the Reserve Bank of India decided on July 22 to allow the settlement of foreign trade in the Indian Rupee (INR). This initiative by the RBI aims to support the interests of the international trading community in the Indian Rupee in addition to facilitating the progress of global trade.

Notably, India imports a sizable amount of palm oil and its derivatives from Malaysia to meet its enormous local demand for edible oil.

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“India International Bank of Malaysia (IIBM), based in Kuala Lumpur, has operationalised this mechanism by opening a Special Rupee Vostro Account through its Corresponding Bank in India i.e. Union Bank of India,” the Ministry of External Affairs said on Saturday.

On the other hand, India on Friday revealed its new Foreign Trade Policy (FTP) 2023, which aims to increase exports to USD 2 trillion by 2030. Additionally, it particularly emphasizes rupee-based international trade settlement. The Indian government has been working towards making Indian Rupee a global currency for quite some time. Now, this new trade agreement with Malaysia will aid in achieving this goal.

Also Read: SBI Fines 23 Entities For Disregarding Trading Norms For Rs 1.55 Crore

 

 

Malika Sahni

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