EDITORIAL: EYE ON EMIRATI FLOWS
The RBI and the Central Bank of the UAE agreed to establish a framework for enabling the use of the two countries' currency for cross-border transactions.
EDITORIAL: EYE ON EMIRATI FLOWS
The RBI and the Central Bank of the UAE agreed to establish a framework for enabling the use of the two countries' currency for cross-border transactions.
The move, of permitting payments in the Indian rupee and the UAE dirham, is aimed at promoting their use bilaterally and thus, reduce dependence on the dollar.
• All current account payments and certain 'permitted capital account transactions could be settled in either of the currencies.
• To facilitate payments, the two banks will set up a Local Currency Settlement System.
• An immediate benefit of the move will be the development of the rupee-dirham foreign exchange market. This will improve the ease of doing business and boost trade.