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    Question

    The Reserve Bank of India (RBI) has given approval for

    India and _____ to use their national currencies for bilateral trade settlement in order to reduce the cost of transactions and enhance the efficiency of cross-border trade.
    A Tanzania Correct Answer Incorrect Answer
    B Morocco Correct Answer Incorrect Answer
    C Kenya Correct Answer Incorrect Answer
    D Nigeria Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

      The Reserve Bank of India (RBI) has given approval for India and Tanzania to use their national currencies for bilateral trade settlement. The use of national currencies in bilateral trade settlements is expected to reduce the cost of transactions and enhance the efficiency of cross-border trade. This, in turn, will lead to increased trade volumes and greater economic cooperation between India and Tanzania.    Under this mechanism, authorised banks in India will open Special Rupee Vostro Accounts (SRVAs) of correspondent banks of Tanzania. Tanzanian banks will have to open Special Rupee Vostro Accounts in India by approaching authorised Indian banks.

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