The Reserve Bank of India with the concurrence of the Government of India has decided to put in place a revised framework on currency swap arrangement for SAARC countries for the period 2024 to 2027. Under this framework, the RBI would enter into bilateral swap agreements with SAARC Central Banks, who want to avail of the swap facility.
The currency swap is an agreement for Central banks and Governments 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.
Under the framework for 2024-27, a separate swap window for the Rupee 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 will continue to offer swap arrangement in USD and Euro under a separate US Dollar/ Euro Swap Window with an overall corpus of USD 2 billion. “In the last few years, currency swap was another approach which we adopted for liquidity purposes,” RBI Governor Shaktikanta Das said during a recent media interaction.
The swap facility will be available to all SAARC member countries, subject to their signing the bilateral swap agreements. A separate INR Swap Window has been introduced with various concessions for swap support in Indian Rupee under the Framework for 2024-27. The total corpus of the Rupee support is Rs 250 billion.
The RBI will continue to offer swap arrangements in US$ and Euro under a separate US Dollar/ Euro Swap Window with an overall corpus of US$ 2 billion.