The Ministry of External Affairs announced on April 1, 2023 that India and Malaysia have agreed to settle trade in the Indian Rupee.
- This development is attributed to the landmark decision taken by the Reserve Bank of India (RBI) in July 2022 to allow the settlement of international trade in the Indian Rupee.
- Malaysia-based India International Bank of Malaysia (IIBM) has operationalised this mechanism by opening a Special Rupee Vostro Account through its correspondent bank in India, ie. Union Bank of India.
- Vostro accounts are used to make payments in domestic currency.
- The move comes in the wake of India making efforts to shift away from US dollars as it has been appreciating against the local currency in the aftermath of the Russia-Ukraine war.