- Both Govts. in discussion to use INR as common currency
- Banking sectors of both countries hold discussion
Stating that the Government of Sri Lanka is in discussion with the Government of India to accept the Indian currency as a common legal currency for transactions between the two nations, Minister of Foreign Affairs, President’s Counsel M.U.M. Ali Sabry noted last Saturday (4) that he hopes it would strengthen and integrate both economies and allow people-to-people contact and more movement.
Meanwhile, the High Commission of India in Sri Lanka organised a discussion on the use of the Indian rupee (INR) for transactions between India and Sri Lanka last Thursday (2).
“Representatives from the Bank of Ceylon, State Bank of India and the Indian Bank shared their experiences and informed the audience that they had started carrying out INR-denominated trade transactions through respective vostro/nostro accounts after the creation of enabling framework by the Reserve Bank of India (RBI) and the Central Bank of Sri Lanka (CBSL) in 2022,” the High Commission said in a statement.
CBSL Governor Dr. P. Nandalal Weerasinghe highlighted the strong desire among Indian and Sri Lankan business communities to enable trade settlements in INR.
A team from the RBI joined the discussion via the online format and indicated the possibility of settlement of current account transactions in goods as well as services in INR, apart from the option of undertaking permitted capital account transactions. The RBI team referred to the close cooperation with CBSL and RBI’s commitment to further facilitate this process.
Addressing the media last Saturday after a meeting with Indian Minister of External Affairs Dr. S. Jaishankar in Hyderabad, Sabry further said: “India is the greatest partner of our recovery and stabilisation. I think all the other countries put together have not done what India has done for us. $ 3.9 billion-worth credit line gave us a lifeline to fight another day. We have fought together so we are very grateful to India. We are grateful for what India has done and we see that India is rising and we want to rise together.”
He further stated to the Indian media last Saturday that Sri Lanka had definitely come a long way since the May-June collapse last year.
“Our inflation is under control. The rupee is stabilised. The queues are no longer there. Tourism has bounced back. Sri Lankans have started to send their funds back through normal channels. Therefore, the country is in a relatively good situation; it has formed a foundation for stability, and along with that, we are expecting the International Monetary Fund’s Extended Fund Facility programme to come through by the end of this month hopefully. With that, I believe that we will be back on track for recovery,” he added.