The action is anticipated to help countries strengthen their connections through trade and investment-led initiatives.
The Indian government along with the Sri Lankan Government initiated a discussion regarding the use of Indian Currency for trade and investment-led initiatives to strengthen the connections between the two countries.
India, Sri Lanka, Indian Currency. Business….
Aiming to establish a secure and firm collaboration through trade and investment-led measures, India and Sri Lanka are exploring the option of utilizing the Indian currency for business transactions. The purpose of initiating this action is to establish a stronger partnership between the two countries.
The discussion was initiated on the 2nd of March by the Higher Commissioner of India to adopt the INR for transactions between India and Sri Lanka.
“Representatives from the Bank of Ceylon, State Bank of India, and the Indian Bank shared their experiences and informed the audience that they had started carrying out INR-denominated trade transactions through respective Vostro/Nostro accounts after the creation of enabling framework by the Reserve Bank of India [RBI] and the Central Bank of Sri Lanka [CBSL] in 2022,” stated the High Commissioner of India on Thursday.
The engaging banks also narrated the benefits of the initiative which is inclusive of reduced timelines, minimal exchange costs, and benefits of trade credits.
The influence of this initiative also intends to benefit tourism and hospitality inclusive of increasing the collections that can be utilized by different sectors.
The High Commissioner of India also highlighted the positive influence that the initiative might hold in the joint efforts toward building a secure and strong partnership between the two countries through trade and investment-led measures.
Shehan Semasinghe, the Finance minister of Sri Lanka acknowledged the close economic relationship between India and Sri Lanka. The Finance Minister also appreciated the financial and humanitarian support offered by India that included the economic assurance provided by New Delhi in reference to the IMF support program for Sri Lanka.
India provided over 3.8 Billion USD to Sri Lanka last year during their economic crisis. A team appointed by the RBI participated in the discussion in the online format and directed the possibility of agreement of the current account transactions of goods and services using the Indian currency excluding the undertaking permitted capital account transactions.
The selected RBI team noted the CBSL’s cooperation and the RBI’s willingness to further ease the procedure.