SAARC Currency Swap Framework

The Reserve Bank of India (RBI) has signed a Currency Swap Agreement with the Maldives. Monetary Authority (MMA) under the SAARC Currency Swap Framework.

  • The SAARC Currency Swap Facility came into operation on 15 November, 2012.
  • This is to provide swap support as a backstop line of funding for short term foreign exchange liquidity requirements.
  • This agreement will enable the MMA to make withdrawals in multiple tranches up to a maximum of USD 200 million from the RBI.

Currency Swap Agreement

  • A currency swap is an agreement between two cross-border entities where one of them agrees to provide a loan to another in a foreign currency.
  • India signed a currency swap agreement of $400 million with Sri Lanka for the year 2019-22.