Finance & Economy

India- Sri Lanka In Talks For INR – Denominated Trade

Published: March 6, 2023
Author: DIGITAL MEDIA EXECUTIVE

India and Sri Lanka have discussed the initiative that will aid in developing a deeper and closer cooperation through trade and investment-led initiatives between the two nations and are looking into the possibilities of adopting the Indian Rupee for business transactions. On Thursday, a discussion about using the Indian Rupee (INR) for transactions between India and Sri Lanka was organised by the Indian High Commission in this city.

Following the establishment of an enabling framework by the Reserve Bank of India (RBI) and the Central Bank of Sri Lanka (CBSL) in 2022, representatives from the Bank of Ceylon, State Bank of India, and the Indian Bank shared their experiences and informed the audience that they had begun carrying out INR-denominated trade transactions through respective Vostro/Nostro accounts. In a statement, the Commission said.

The participating banks also listed the advantages of settling in INR, such as quicker turnaround times, cheaper exchange rates, and simpler access to trade credits.The positive effects of this project on the travel and hospitality sector, particularly its part in boosting collections that other industries may use, were also noted.

Gopal Baglay, the High Commissioner of India to Sri Lanka, emphasised the initiative’s benefits for the combined efforts to forge a deeper and tighter economic cooperation between the two nations through trade and investment-driven measures.

Shehan Semasinghe, Sri Lanka’s finance minister, expressed appreciation for the two nations’ tight economic ties as well as for India’s financial and humanitarian assistance over the previous year. In a statement, the Commission said. The participating banks also listed the advantages of settling in INR, such as quicker turnaround times, cheaper exchange rates, and simpler access to trade credits.

The positive effects of this project on the travel and hospitality sector, particularly its part in boosting collections that other industries may use, were also noted. Gopal Baglay, the High Commissioner of India to Sri Lanka, emphasised the initiative’s benefits for the combined efforts to forge a deeper and tighter economic cooperation between the two nations through trade and investment-driven measures.

Shehan Semasinghe, Sri Lanka’s finance minister, expressed appreciation for the two nations’ tight economic ties as well as for India’s financial and humanitarian assistance over the previous year. Included in the context of the IMF support programme for Sri Lanka are the substantial finance assurances offered by New Delhi.

Last year, India gave Sri Lanka assistance of more than USD 3.8 billion to help them deal with the economic crisis. The governor of the CBSL, Dr. P Nandalal Weerasinghe, emphasised the keen interest in permitting trade settlements in INR among the business communities of India and Sri Lanka.

A team from the RBI entered the online conversation and mentioned that, in addition to being able to conduct legal capital account transactions, current account transactions for goods and services may also be settled in INR. The tight collaboration with CBSL and RBI’s commitment to further facilitating this process were mentioned by the RBI team.

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