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Tanzania and India are working out a new trade settlement arrangement, which can minimize reliance on major global currencies, apart from promoting trade in respective local currencies
Tanzania and India are working out a new trade settlement arrangement, which can minimize reliance on major global currencies, apart from promoting trade in respective local currencies.
People who are trading with India in Tanzania recently held a consultation organized by the Indian Institute of Chartered Accountants, which discussed the implications of the Rupee Nostro Account System. This follows the recent announcement of both countries to commence trading in their respective local currencies. A few other countries in Africa and elsewhere also have shown interest in this arrangement of trading.
One of the key advantages highlighted during the discussion was the reduction in dependency on hard currencies. Stakeholders were upbeat that the system would alleviate the need for constant currency conversions and reliance on foreign exchange reserves.
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Managing director of Bank of India in Tanzania, Antaryami Sarangi, said the system offered immense potential for business entities, which could effectively manage their forex balances and mitigate exchange risks associated with volatile global currencies. The Indian High Commission in Dar es Salaam said the Reserve Bank of India (RBI) had cleared the way for trade using local currencies by allowing authorised banks in India to open Special Rupee Vestro Accounts (SRVA) in Tanzania.
