Trade transactions with Lanka could also be settled exterior ACU: RBI

The Reserve Bank has introduced that each one eligible present account transactions together with commerce transactions with Sri Lanka could also be settled in any permitted foreign money exterior the Asian Clearing Union (ACU) mechanism till additional discover.

The new system will come into power with speedy impact. Central banks and financial authorities of Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka are at present members of the ACU.

Asian Monetary Unit (AMU) is the widespread unit of account of ACU and is denominated as ‘ACU dollar’, ‘ACU euro’ and ‘ACU yen’, which is equal in worth to 1 US greenback, one euro and one Japanese yen respectively. All devices of funds underneath ACU should be denominated in AMUs. Settlement of such devices is made by Category-I banks by way of the ACU greenback accounts, ACU euro accounts and ACU yen accounts, which must be distinct from the opposite US greenback, euro and Japanese yen accounts respectively maintained for non-ACU transactions.

Headquartered in Tehran, Iran, the ACU was established on December 9, 1974 on the initiative of the United Nations Economic and Social Commission for Asia and Pacific (ESCAP), for selling regional cooperation. Its goal is to facilitate funds amongst member nations for eligible transactions on a multilateral foundation, thereby economising on using overseas change reserves and switch prices, in addition to selling commerce among the many collaborating nations.