Sri Lanka's use of INR to alleviate currency crisis will strengthen its bilateral relations with India

Colombo [Sri Lanka], March 7 : Crippling with the economic crisis, Sri Lanka has initiated the use of the Indian Rupee (INR) for economic transactions with India. This move will not only assuage Sri Lanka's currency crisis but also will improve its bilateral ties with India, reported Mawrata News.
The Deputy High Commissioner of India to Sri Lanka, Vinod K Jacod, while addressing the inauguration of the Medicare 2023 health care exhibition in Colombo on March 3, 2023, said that the bilateral ties between India and Sri Lanka are at their peak. He cited strong people-to-people ties as the primary driver. The Indian Rupee (INR) will be used for commercial transactions between India and Sri Lanka starting on March 2, 2023, according to discussions between the high commissions of India and Sri Lanka.
According to a Sri Lankan website, Mawrata News, after the Reserve Bank of India (RBI) and the Central Bank of Sri Lanka (CBSL) created an enabling framework in 2022, representatives from the Bank of Ceylon, the State Bank of India, and the Indian Bank shared their experiences and informed the audience that they had started carrying out INR-denominated trade transactions through their respective Vostro/Nostro accounts.
On March 2, 2023, a discussion on the usage of the Indian Rupee (INR) for trade between India and Sri Lanka was organised by the Indian High Commission. The participating banks listed the advantages of settling in INR, such as quicker turnaround times, cheaper exchange rates, simpler access to trade credits, etc. The positive effects of this programme on the travel and hospitality sector, including its contribution to raising collections that can be used by other industries, were also noted.
The benefit of settling in INR was also discussed by the participating banks, including quicker timescales, cheaper exchange rates, and simpler access to trade credits, among other factors. The initiative's beneficial effects on the travel and hotel industries were also emphasised, as was its contribution to growing collections that other industries may make use of.
The Deputy High Commissioner stated that the bilateral relations between India and Sri Lanka are at their peak and largely focused on five key developments that are at the heart of the strong bilateral relationship, read a report in Mawrata News.
Despite occasional tensions and disagreements, particularly over maritime boundary disputes, India and Sri Lanka have signed a number of bilateral agreements to strengthen their relationship, including trade agreements, cultural exchange initiatives, and defence cooperation. The two nations have also disagreed over China's expanding influence in the region.
India and Sri Lanka have continued to hold high-level visits and meetings and have signed several agreements in recent years to strengthen their economic and security ties. However, the diplomatic relations between the two countries are subject to change based on various factors including geopolitical changes, leadership changes, and other international developments.
The diplomat also noted that in addition, a significant amount of support was provided through the iconic Suwaseriya 1990 ambulance during Covid-19, as well as through medical supplies in response to specific requests from hospitals in Kandy, Hambantota, and Jaffna. This support was extended by the people and government of India during Vaccine Maitri and with the expedited issuance of medical visas, immediately after the lifting of travel restrictions by the government of Sri Lanka.
He remembered that Sri Lanka had asked India and the Sri Lankan government for $4 billion in economic, financial, and humanitarian support in 2022.
In a show of unity, India has been standing behind Sri Lanka at G20 summits and has also extended an invitation to HE President Ranil Wickremesinghe to attend the Voice of Global South Conference in January 2023.
The sharing of intelligence information that exposed the island's expanding network of Islamic radicals was greatly assisted by India. Although the Easter attacks may have been avoided, Sri Lanka was informed by India.
India has legitimately expressed alarm over China's expanding influence in Sri Lanka. India considers China's expanding influence in Sri Lanka, a strategically significant nation in the Indian Ocean, to be a possible danger to national security.
India built a cultural centre in Jaffna and is also preparing to begin a ferry service between Sri Lanka and South India. The opening of Palaly's international airport has also prompted visitors from both sides to use both its land and air services.
India has worked to strengthen its ties with Sri Lanka in reaction to China's expanding influence there, offering assistance for economic growth and security cooperation. In order to counter China's influence in the Indian Ocean, India has also attempted to cooperate with other nations in the area, such as Japan and Australia, Mawrata News reported.