With which country has the Reserve Bank of India (RBI) launched a Local Currency Settlement System as part of recent MoUs which covered areas such as currency settlement, water management, and shipping information sharing?

The correct answer is Mauritius.

In News

• India and Mauritius signed multiple MoUs, including one between the Reserve Bank of India (RBI) and the Central Bank of Mauritius for launching a Local Currency Settlement System.

Key Points

• The Local Currency Settlement System will facilitate seamless financial transactions between India and Mauritius.
• The MoU is part of broader economic cooperation efforts, covering currency settlement, water management, and financial crime prevention.
• Other agreements include a Credit Facility Agreement between Mauritius and SBI to finance water infrastructure projects.
• India and Mauritius continue to strengthen their bilateral relations through strategic partnerships in trade, security, and infrastructure.

Additional Information

• Local Currency Settlement System
  • This system allows bilateral trade transactions to be settled in local currencies instead of relying on third-party foreign currencies like the US dollar.
  • It helps reduce exchange rate fluctuations and dependence on external reserves.
• India-Mauritius Economic Ties
  • India is one of Mauritius’ largest trading partners and development aid contributors.
  • Key Indian-funded projects in Mauritius include Metro Express, New ENT Hospital, and Supreme Court building.
• Recent India-Mauritius Agreements
  • Technical Agreement between the Indian Navy and Mauritius Police for maritime security.
  • Cooperation between financial agencies to combat financial crimes and fraud.