(2 minutes read)
Tanzania has been added to the list of countries cleared by the Reserve Bank of India (RBI) to use local currencies for trade. Under the historic arrangement, RBI allows the authorised Indian banks to open Special Rupee Vostro Accounts (SRVA) of correspondent banks of Tanzania.
Tanzania has been added to the list of countries cleared by the Reserve Bank of India (RBI) to use local currencies for trade. Under the historic arrangement, RBI allows the authorised Indian banks to open Special Rupee Vostro Accounts (SRVA) of correspondent banks of Tanzania.
The High Commission of India in Dar es Salaam said in a statement issued under this mechanism, Tanzanian banks can open Special Rupee Vostro Accounts in India by approaching authorised Indian banks that will in turn approach RBI for their approval with details of the arrangement. The Bank of Baroda which has branches operating in Tanzania has received RBI’s approval for opening Special Vostro Accounts (SRVAs). According to Financial Analysts, such a bilateral agreement will ease the pressure of the US Dollar on the shilling. The new mechanism they feel will promote trade between Tanzania and India. It will offer an alternative exchange rate between the two countries, to offset global economic shocks. The relative value of the shilling and the rupee would be determined primarily by the balance of payment between the two countries. In 2022, India was the largest trading partner in Tanzanian exports and third in imports, behind China and UAE.
Read Also;
http://trendsnafrica.com/stringent-monitoring-of-foreign-currency-sourcing-in-tanzania/
The High Commission of India is organising a Stakeholders Consultation Meeting on March 24, 2023 to disseminate further details about the bilateral trade mechanism using local currency and its benefits. Apart from Tanzania, other African countries that will benefit from this arrangement are Kenya, Uganda, Botswana, Mauritius, and Seychelles.
