RBI revises currency swap framework for SAARC countries

Corpus of Rupee support is Rs250 bn; $2bn for dollar and euro

MUMBAI: The Reserve Bank of India (RBI) has decided to put in place a revised Framework on Currency Swap Arrangement for SAARC countries for the period 2024 to 2027, an RBI official note stated.

The total corpus of the Rupee support is Rs250 billion.

The Framework on Currency Swap Arrangement for SAARC countries is an initiative designed to promote financial stability and cooperation among the member countries of the South Asian Association for Regional Cooperation (SAARC).

Under the Framework for 2024-27, a separate Indian Rupee Swap Window has been introduced with various concessions for swap support in Indian Rupee.

$2 bn swap in dollar, euro

The RBI will continue to offer swap arrangement in US dollar and Euro under a separate US Dollar/ Euro Swap Window with an overall corpus of $2 billion.

The Currency Swap Facility will be available to all SAARC member countries, subject to their signing the bilateral swap agreements.

Under this Framework, RBI would enter into bilateral swap agreements with SAARC central banks, who want to avail of the swap facility.

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 made.