Indian Rupee and Maldivian Rufiyaa Now Permitted for Bilateral Trade Settlements Under FEMA Regulations

Following a November 2024 MoU between RBI and Maldives Monetary Authority, bilateral trade transactions between India and Maldives may now be settled in Indian Rupee (INR) and/or Maldivian Rufiyaa (MVR) in addition to the existing Asian Clearing Union (ACU) mechanism. This regulatory amendment, issued under FEMA SSSS10(4) and 11(1), modifies the Foreign Exchange Management Regulations 2023 regarding payment methods between ACU member countries. The directive, effective immediately, establishes a framework promoting local currency usage for cross-border transactions while maintaining the ACU settlement option that was previously available. .....

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