Sri Lanka has agreed to use the Indian Rupee (INR) for foreign trade after the Indian Government said that it is looking for ways to bring countries into the ambit of the Indian rupee trade settlement mechanism that has a shortage of dollars.
Reportedly the Bank of Ceylon has opened special rupee trading accounts – Special Vostro rupee accounts, or SVRA – to trade in INR.
The Central Bank of Sri Lanka (CBSL) has stated that it is awaiting the approval of the RBI (Reserve Bank of India) to nominate the Indian Rupee as a foreign currency of Sri Lanka.
Sri Lanka has been facing a degrading economy since last year, especially a shortage of US dollars. Designating the Indian rupee as a legal currency would help them with liquidity support.
Apart from Sri Lanka, countries such as Russia, Cuba, Luxembourg and Sudan have also been attracted to use the Indian rupee for international trade.
For India, the rupee being used by other countries in their international trade would help India to overcome their trade deficit and eventually strengthen it in the global market.
Sri Lanka has been facing a degrading economy since last year, especially a shortage of US dollars. Designating the Indian rupee as a legal currency would help them with liquidity support. - businessworld.in
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BOC executes first INR transaction with India
The Bank of Ceylon (BOC) has completed all requirements to include INR as a designated currency and is now able to arrange bilateral transactions with India and assist customers in transactions including exports, imports and remittances while reducing the dependence on the US dollar.
The Central Bank of Sri Lanka recently introduced the Indian Rupee (INR) as a designated foreign currency to promote trade and tourism in the SAARC region. This enables Sri Lankan residents to conduct transactions in INR.
The scope of India and Sri Lanka’s healthy economic and commercial partnership will reach new heights by executing trade transactions directly in INR and will also immensely facilitate exporters and importers in both countries.