RBI Mauritius Pact: Strengthening Bilateral Trade with INR-MUR Transactions
RBI Mauritius Pact: How INR-MUR Trade & Settlement Will Boost Bilateral Trade
RBI and Bank of Mauritius Partner to Promote INR-MUR Trade Transactions
The Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have entered into a strategic partnership to facilitate cross-border transactions in the Indian Rupee (INR) and Mauritian Rupee (MUR). This agreement aims to boost bilateral trade and financial integration between the two nations while reducing dependency on hard currencies like the USD.
Let’s dive into the details of this transformative agreement and its impact.
Key Highlights of the RBI Mauritius Pact Agreement
What is the Agreement About? 
Aims to promote INR-MUR transactions for trade, investments, and remittances. Covers all current account transactions and certain capital account transactions agreed upon by both countries. Enables exporters and importers to invoice and settle trade in their respective local currencies. Optimizes costs and settlement time for cross-border transactions. Strengthens historical, cultural, and economic ties between India and Mauritius.
When and Where Was It Signed? The MoU was signed in Port Louis, Mauritius, in the presence of Indian Prime Minister Narendra Modi and Mauritian Prime Minister Navinchandra Ramgoolam on March 12, 2025.
What Will Be Implemented? Launch of INR-MUR Local Currency Settlement (LCS) System to facilitate cross-border trade. Establishment of an INR Clearing Centre in Mauritius for seamless INR transactions. Inclusion of INR as a settlement currency in the Mauritius Automated Clearing and Settlement System. Extension of INR Clearing Centre to COMESA (Common Market for Eastern and Southern Africa), boosting INR usage in Africa.
Potential Benefits:
| Aspect | Impact |
|---|---|
| Trade and Investment | Reduces reliance on USD and strengthens INR-MUR transactions |
| Financial Integration | Enhances cooperation between Indian and Mauritian financial systems |
| Cost Efficiency | Lowers transaction costs and processing time |
| Currency Stability | Promotes INR as a preferred currency in Mauritius and Africa |
How the RBI Mauritius Pact Enables INR-MUR Transactions
1. INR-MUR Local Currency Settlement System (LCS)
The new LCS system will allow businesses to settle payments directly in INR and MUR, avoiding conversion to USD or other foreign currencies. This reduces foreign exchange risks and enhances economic stability.
2. INR Clearing Centre in Mauritius
Commercial banks in Mauritius will be able to hold INR accounts at the Bank of Mauritius for seamless transactions. The INR Clearing Centre will facilitate cross-border INR payments and make Mauritius a financial hub for INR transactions in Africa.
3. INR Inclusion in the COMESA Regional Payment and Settlement System
The Bank of Mauritius is the settlement bank for COMESA, which covers 21 African countries. The introduction of INR as a settlement currency in COMESA will boost INR’s presence in African markets.
This initiative strengthens Mauritius as a key jurisdiction for INR-based trade settlements in Africa.
Why the RBI Mauritius Pact Matters: Economic & Trade Implications
For India: Increases acceptance of INR in international trade, reducing dependence on the US dollar. Strengthens India’s economic influence in the Indian Ocean and Africa. Provides Indian businesses with more efficient and cost-effective trade settlements.
For Mauritius: Strengthens Mauritius’ position as an international financial hub. Reduces currency risks for businesses dealing with Indian partners. Enhances Mauritius’ financial sector by enabling direct INR transactions.
For Businesses & Investors: Lowers transaction costs for exporters and importers. Improves trade efficiency and financial market liquidity. Encourages more direct investments between India and Mauritius.
Key Takeaway: The RBI-BOM agreement is a game-changer that boosts financial cooperation, trade efficiency, and INR’s global acceptance.
RBI Mauritius Pact: The Future of INR in Global Trade
This agreement is a major step in India’s goal of internationalizing the Indian Rupee. Mauritius becomes a strategic INR-clearing hub for African trade. Businesses in both countries will benefit from reduced transaction costs and enhanced trade efficiency. Future expansions into other African and Asian markets could further establish INR’s role in global trade.
India and Mauritius are setting a precedent for bilateral trade settlements using local currencies—paving the way for future global partnerships!
Disclaimer—Estabizz Fintech Private Limited
At Estabizz Fintech Private Limited, we provide expert insights into international trade, finance, and regulatory developments. However, this article is for informational purposes only and should not be considered financial or investment advice.
Readers should consult certified financial advisors before making any trade or investment decisions based on this information.
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