The Reserve Bank of India announced on Thursday its updated Framework on Currency Swap Arrangement for SAARC countries for the period 2024 to 2027, in concurrence with the Government of India.
Under this Framework, the Reserve Bank will enter bilateral swap agreements with SAARC central banks interested in availing the swap facility.
“It may be recalled that the SAARC Currency Swap Facility came into operation on November 15, 2012 with an intention to provide a backstop line of funding for short term foreign exchange liquidity requirements or balance of payment crises of the SAARC countries till longer term arrangements are mad,” RBI stated in its press release.
The apex bank aims to provide a safety net for SAARC nations facing short-term foreign exchange liquidity issues or balance of payment crises by offering a backstop funding line.
This ensures these countries have access to necessary financial resources until longer-term solutions are established.
In the 2024-27 Framework, a separate INR Swap Window has been introduced with various concessions for swap support in Indian Rupee, totaling ₹250 billion. The RBI will also offer swap arrangements in US$ and Euro under a separate US Dollar/Euro Swap Window, with an overall corpus of US$ 2 billion.
The Currency Swap Facility will be accessible to all SAARC member countries upon signing bilateral swap agreements.
SAARC member countries include Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.
