India and Myanmar are exploring the possibility of conducting bilateral trade in their national currencies under the Asian Clearing Union (ACU) mechanism.

Foreign secretary Ranjan Mathai told reporters here that since Myanmar is a member of ACU, both sides are in talks to examine the possibility of trading in their own currencies.

Competiveness of Indias trade with Myanmar can be significantly enhanced if India adopts a strategy whereby Myanmar accepts payment for all its exports to India in Indian rupees and the export earnings can be used to make payments for goods and services imported from India, as is the practice being followed in trade between India and Nepal and India and Bhutan, according to a FICCI survey.

Myanmar is a member of Asian Clearing Union (ACU) and settlement of current account transactions including trade transactions are done through ACU mechanism.

The Reserve Bank of India had decided in 2004 to allow trade transactions with Myanmar to be settled in any freely convertible currency in addition to the ACU mechanism.

Subsequently, the position changed whereby ACU mechanism could not be used for trade with Myanmar in ACU Dollar.

Source : financialexpress