Rupee-kyat trade settlement mechanism now operational

The rupee-kyat trade settlement mechanism is operational now. India executed the first transaction of over ten million rupees for pulse exports via the Punjab National Bank Yangon office on 2 July 2024, according to the Embassy of India to Myanmar.
The embassy encouraged businesses from both sides to benefit from that mechanism. An awareness event on the rupee-kyat trade settlement mechanism was held on 9 February. Mr Vinay Kumar, Ambassador of India to Myanmar, gave a greeting remark that the rupee-kyat trade settlement mechanism will promote bilateral trade and ensure smooth trade flow. That mechanism will cover both border and sea trade channels. Hopefully, it will entice traders as well as those engaged in micro, small and medium enterprises to participate in bilateral trade. It will create more jobs, contribute to economic development, simplify transactions, and make them cost-efficient.
CBM Governor Daw Than Than Swe said that the mechanism aims to bolster trade, facilitate trade, simplify transactions, reduce dollar dependence, lessen impacts from volatile exchange rates and promote the use of national currency.
Myanmar negotiated with the Embassy of India through diplomacy and the Reserve Bank of India to implement the rupee-kyat trade settlement. India is one of Myanmar’s important trade partners. It is the fourth-largest exporting and the sixth-largest importing country of Myanmar.
Among the Asian Clearing Union (ACU), Myanmar is India’s top trading partner. Additionally, CBM released guidelines for payment procedures under the Special Rupee Vostro Account (SRVA), and the rupee-kyat trade settlement mechanism has been operationalized.
The mechanism will enhance the use of local currency and strengthen bilateral relations. Merchants need to apply for a licence to execute transactions and can process through banking, said Daw Than Than Swe. — NN/KK