Mumbai, Mar 17 (PTI) Reserve Bank on Monday said India's bilateral trade transactions with Maldives may also be settled in INR and/or MVR in addition to the ACU mechanism.

Asian Clearing Union (ACU) is a payment arrangement whereby the participants settle payments for intra-regional transactions among the participating central banks on a net multilateral basis.

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The participants include central banks and the monetary authorities of Bangladesh, Belarus, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka.

A Memorandum of Understanding (MoU) has been signed between RBI and Maldives Monetary Authority in November 2024 for establishing a framework to promote the use of local currencies -- Indian Rupee (INR) and Maldivian Rufiyaa (MVR) for bilateral transactions.

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"In the wake of signing of Memorandum of Understanding (MoU)...it has been decided that India's bilateral trade transactions with Maldives may also be settled in INR and/or MVR in addition to the ACU mechanism, as hitherto," the RBI said in a circular.

The RBI further said the instructions shall come into force with immediate effect.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)