India’s central bank RBI extended $400 million of currency swap with Indian Ocean nation Sri Lanka. The currency swap agreement signed for next 2 years till November 2022.
The currency swap facility was run further under the SAARC (South Asian Association for Regional Cooperation) Currency Swap Framework. Bilateral currency swap between India and Sri Lanka, Sri Lanka has around $1 billion of loan commitment from India.
What is Currency Swap?
A Currency Swap agreement between 2 nations to exchange their national currency with dollar. Neighbouring nations Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka are under SAARC Currency Swap Framework.
Current currency swap agreements
Since December 2019, SAARC currency swap agreement was signed run till 2022.
- The RBI will offer swap arrangement with an overall corpus of $2 billion
- The Reserve Bank agreed to enter into bilateral swap agreements with SAARC nations central banks that wishes to avail swap facility.
- The withdrawals can be made in terms of $, ₹ or €
India currency swap
Recently, India has signed currency swap line with Japan, SAARC nations and the United States of America.
India extends Currency Swap with Sri Lanka India extends Currency Swap with Sri Lanka