The Reserve Bank of India on Thursday introduced a new currency swap window worth Rs 250 billion to support the Indian Rupee for South Asian Association for Regional Cooperation countries, offering various concessions, reported NDTV.
SAARC consists of eight member states: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.
Moreover, the RBI plans to maintain swap agreements in US Dollar and Euro through a separate US Dollar/Euro Swap Window totaling $2 billion. This initiative was revealed in the SAARC Currency Swap Framework for 2024-27.
“Under the Framework for 2024-27, a separate INR Swap Window has been introduced with various concessions for swap support in Indian Rupee. The total corpus of the Rupee support is Rs 250 billion,” the RBI stated.
The currency swap facility will be available to all SAARC member countries, provided they sign bilateral swap agreements with the RBI.
With the central government’s approval, the RBI decided to implement a revised Currency Swap Arrangement Framework for SAARC countries for the period 2024-27.
Under this framework, the RBI will enter into bilateral swap agreements with SAARC central banks that wish to use the swap facility.
The SAARC Currency Swap Facility started on Nov. 15, 2012, to offer a back-up funding line for short-term foreign exchange liquidity needs or balance of payment crises in SAARC countries until long-term arrangements can be made.