India-UAE agree for trade settlement in local currencies

New Delhi, July 17 (KNN) India and the United Arab Emirates (UAE) jointly announced on Saturday the commencement of trade settlement using their respective local currencies.

This was confirmed after discussions were held between Prime Minister Narendra Modi and President Sheikh Mohamed bin Zayed Al Nahyan of UAE.

Further, the Indian Unified Payments Interface will be interconnected with the Gulf kingdom’s Instant Payment Platform (IPP).

As per an official statement, the Reserve Bank of India (RBI) Governor Shaktikanta Das and the Central Bank of the UAE Khaled Mohamed Balama have signed two MoUs.

The first aims to establish a framework that encourages the utilisation of local currencies, specifically the Indian rupee (INR) and the UAE Dirham (AED), for cross-border transactions. 

The second MoU focuses on cooperation for interlinking their payment and messaging systems. 

The primary objective of the MoU on establishing a framework for the use of local currencies is to implement a Local Currency Settlement System (LCSS) that promotes bilateral use of the INR and AED for transactions between India and the UAE.

PM Modi emphasised that the agreement for trade settlement in the currencies of both nations exemplifies the robust economic cooperation and mutual trust shared by India and the UAE.

In his public remarks, HE highlighted that trade between India and the UAE has experienced a notable 20% growth since the signing of the Comprehensive Economic Partnership Agreement in the previous year.

On the MoUs between the central banks, he said, “This is a very important aspect of India-UAE cooperation. It paves the way for enhanced economic collaboration and will make international financial interactions simpler.”  (KNN Bureau)