India, Sri Lanka push local currency trade

India and Sri Lanka have discussed ways to enhance trade settlement in local currencies to reduce transaction costs and insulate the bilateral trade from dollar volatility.

Local currency settlement reduces transaction costs, eliminates conversion losses in both directions, and insulates bilateral trade from dollar volatility, said Santosh Jha, Indian High Commissioner.

“And for Sri Lanka specifically, it reduces pressure on scarce hard currency reserves — preserving dollars for uses where they are truly necessary, while rupee-to-rupee trade flows freely between our two economies,” Jha said at a round-table discussion on ‘Rupee to Rupee: Strengthening the India-Sri Lanka Commercial Corridor’.