Bank of Baroda Fiji customers buying from India can now settle their purchases directly in Indian rupees with the launch early this month of a Special Rupee Vostro Account (SRVA) to facilitate direct Fiji dollar to Indian rupee settlement.
BOB Fiji’s chief executive officer Lekshmy Anand said this should help reduce invoicing costs for Fiji-India traders.
“Currently, when you are buying something from India, the invoice is raised in US dollars. Since there are exchange rates costs, hedging costs, corresponding bank charges involved, the invoice price costs will have to be mitigated so the price will have to be increased a little bit,” Ms Anand said in an interview with The Fiji Times.
“This is where trade settlement in Indian rupee comes into picture. Now, they (traders in India) can raise the invoice in Indian rupee itself from India. It is easier for them. And these costs are saved, so they pass on the benefits to the buyers by reducing the invoice so there will be lower invoicing. So that is beneficial for those Fijian traders who are importing from India.” She said the SRVA would facilitate the direct transactions.
“Time is also saved because it gets credited on the same day in Indian rupee itself, so there is no hedging costs involved, they don’t have to worry about fluctuations,” she said.
Suva Retailers Association president Jitesh Patel said members were pleased with the initiativelooking forward to the reduction in bank charges.
