India, Tanzania Plan to Increase Trade in National Currencies
Since 2016, Tanzania and India have been consistently strengthening their partnership. This year, Tanzania started to explore the possibility of using local currencies in bilateral transactions with a BRICS member, India.
Indian Prime Minister Narendra Modi and Tanzanian President Samia Suluhu Hassan expressed their desire to expand bilateral trade using local currencies, according to a joint statement issued on Monday, after their meeting in New Delhi.
The leaders paid attention to the fact that the Reserve Bank of India
has opened the option for trading in the local currencies.
"They noted that Reserve Bank of India (Indian Central Bank) has cleared the way for trade using local currencies i.e. Indian Rupee (INR) & Tanzanian Shilling by allowing the authorized banks in India to open Special Rupee Vostro Accounts (SRVA) of correspondent banks of Tanzania and that transactions using this mechanism have already materialized," the statement reads.
The two parties reached an agreement to carry on with the consultations to address any concerns and ensure the sustainability of this arrangement.
Moreover, both countries agreed to increase bilateral trade volume and proposed to explore the possibility of setting up of an Investment Park in Tanzania.
The Tanzanian president arrived in New Delhi on Sunday to meet with India's prime minister. During the meeting they agreed to elevate bilateral relations to a "Strategic Partnership" to work together on issues such as defense cooperation, trade, investment, maritime security and others.
In recent years, many countries in Africa and around the world have taken steps to reduce their dependence on the US dollar.
At the end of May, it was reported that Tanzania country was exploring the possibility of using local currencies in bilateral transactions with a BRICS
member, India. Later in June, the Bank of Tanzania (BoT) warned businesses against using the US dollar in local trade.