India and Tanzania have agreed to start trading in their own indigenous currencies in a bid to increase trade between Dar Es Salaam and New Delhi. The countries will embark on the usage of the ramifications of the Rupee Nostro Account System. The system's potential to reduce the need for ongoing currency conversions and dependence on foreign exchange reserves encouraged stakeholders.
According to Antaryami Sarangi, managing director of the Bank of India in Tanzania, the system has enormous potential for corporate organizations, which can efficiently manage their foreign exchange balances and avoid exchange risks associated with fluctuating global currencies.
Aditya Narayan Singh, managing director of Bank of Baroda, stated that the arrangement is anticipated to result in decreased transaction costs, which would be advantageous for companies of all sizes. "By eliminating the need for constant currency conversions, settlement times can be significantly reduced and yield lower transaction costs.”
Source: garoweonline.com