RBI signs Currency Swap Agreement with Maldives Monetary Authority

Tags: Economy/Finance

RBI signs Currency Swap Agreement

The Reserve Bank of India (RBI) has signed a Currency Swap Agreement with the Maldives Monetary Authority under the SAARC Currency Swap Framework on 8 December 2022. Maldives Monetary Authority is the central bank of Maldives.

This agreement will enable the Maldives authority to make drawals in multiple tranches up to a maximum of 200 million dollars from the RBI. The agreement will provide swap support as a backstop line of funding for short-term foreign exchange liquidity requirements. 

SAARC (South Asian Association of Regional Cooperation) Currency Swap Framework

The SAARC Currency Swap Facility of the Reserve Bank of India came into operation on November 15, 2012. The aim of the facility is to provide a short term funding arrangement to deal with their short term foreign exchange liquidity requirements or balance of payment crises till longer term arrangements are made. 

The corpus of the SAARC Currency Swap Facility of the RBI is USD 2 Billion.

At present the swap facility is available in US dollar, Euro and Indian Rupees.

However this facility is available to only those SAARC countries which have signed a bilateral agreement with RBI. India, Pakistan, Sri Lanka, Bhutan, Nepal, Bangladesh, Maldives, Nepal and Afghanistan are the members of SAARC. 

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