• UGI USER
  • Mar 08, 2024
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RBI, BANK INDONESIA TO USE LOCAL CURRENCIES FOR TWO-WAY DEALS

Why in the news?

RBI and Bank Indonesia sign MoU to promote cross-border transactions in local currencies, aiming to boost trade and financial integration.

source:lotusrise

Highlights of the Agreement:

  • RBI and Bank Indonesia (BI) signed a Memorandum of Understanding (MoU) to promote local currency usage for cross-border transactions.
  • Aim is to encourage the use of Indian Rupee (INR) and Indonesian Rupiah (IDR) in bilateral trade.
About IDR (Indian Depository Receipt):

 An IDR, or Indian Depository Receipt, allows foreign companies to raise funds from Indian securities markets via depository receipts denominated in Indian Rupees.

●   IDRs can be bought by any resident individual in India under FEMA regulations.

●   The minimum application amount for IDRs is Rs. 20,000.

●   Indian companies investing in IDRs must adhere to applicable investment limits.

About INR (Internationalisation of Rupee):

●   Increase use of Indian Rupee (INR) in cross-border transactions.

●   Initially focus on import/export trade promotion.

●   Progress to include other current account transactions.

●   Ultimate goal is integration into capital account transactions.