The Indian rupee can now be used in addition to other currencies to settle trade between India and Malaysia, the Ministry of External Affairs (MEA) announced on Saturday.
The decision comes in response to the Reserve Bank of India’s decision to permit the settlement of international transactions in Indian currency in July of last year.
“Trade between India and Malaysia can now be settled in Indian Rupee (INR) in addition to the current modes of settlement in other currencies,” the MEA said.
“This follows the decision by the Reserve Bank of India in July 2022 to allow settlement of international trade in Indian Rupee,” it added.
The RBI’s initiative, according to the MEA, is to encourage trade expansion and advance the interests of the global trading community in the Indian rupee.
“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 that is Union Bank of India,” it noted.
Vostro accounts are used to make local currency payments.
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