RBI Unveils SAARC Currency Swap Framework for 2024-27

Ira Singh
Khabar Khabaron Ki,28 June’24

The Reserve Bank of India has established a revised framework for currency swap arrangements specifically targeting countries within the South Asian Association of Regional Cooperation (SAARC) for the period spanning 2024 to 2027. These frameworks provide support in Indian Rupees (INR), US Dollars (USD), and Euros (EUR), offering crucial financial assistance to member countries.This updated framework aims to provide enhanced financial stability and support to SAARC member nations by offering flexible and accessible liquidity solutions.

The Reserve Bank of India (RBI) has reportedly, introduced a Rs 250 billion ($3 billion) swap window for nations that are part of the South Asian Association for Regional Cooperation (SAARC). The RBI revised its SAARC currency swap framework to introduce the rupee swap window with various concessions, the central bank stated in a report on Thursday.

The RBI will continue to offer swap arrangements in US dollar and euro under a separate window with an overall corpus of $2 billion,according to information. Eight nations are part of SAARC, including Sri Lanka, Bangladesh, Pakistan and Afghanistan.

The SAARC currency swap facility was launched in November 2012 to provide a backstop line of funding for short-term foreign exchange liquidity requirements or balance of payment crises of member countries. The currency swap window will be available to all SAARC member countries, provided they sign bilateral agreements, according to information.

The introduction of the rupee swap window is expected to strengthen monetary cooperation and financial stability within the SAARC region. By offering diversified currency options and additional concessions, the RBI aims to support member countries in managing short-term financial challenges more effectively.