INSIGHTS
- A delegation of Indian exporters recently requested visiting Myanmarese commerce minister U Aung Naign Oo in Kolkata to speed up the process of trade settlements through mutual currencies, a mechanism that was earlier agreed.
- Oo hoped that negotiations on the issue would be finalised by June end and bilateral trade would at least double after that.
A delegation of Indian exporters recently met visiting Myanmarese commerce minister U Aung Naign Oo in Kolkata and urged him to accelerate the process of trade settlements through each other’s currencies, a mechanism that was earlier agreed.
Negotiations on the issue would be finalised by the end of June, Oo was quoted as saying by media reports.
Facing shortages of foreign exchange reserves, Myanmar announced last year that it would start accepting Indian rupees, along with the Thai baht and China’s renminbi as an official settlement currency to cut its dependence on the US dollar.
Indian exporters feel the arrangement is expected to help export of pharmaceutical and manufacturing items from India as well as boost import of pulses, timber and other products from Myanmar.
India’s central bank had earlier authorised the state-controlled Punjab National Bank to open a special rupee vostro account for foreign trade settlements with Myanmar.
It said PNB approached Myanmar’s CB Bank and UAB Bank of Myanmar to open a vostro account for trade settlements in Indian rupees and kyat, but the Myanmar government wanted to involve other banks in the new mechanism.
The Sittwe port in Myanmar, built under a grant assistance from the government of India as part of Kaladan Multimodal Transit Transport Project, was operationalised last month, and it would be dedicated for trade with east India once commercial operations start, Oo added.
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