RBI Revises Framework On Currency Swap Arrangement For SAARC Countries

The Reserve Bank on Tuesday said it has put in place a revised framework on currency swap arrangement for SAARC countries for 2019-2022. 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 till longer-term arrangements are made.

“Based on the terms and conditions of the framework, the RBI would enter into bilateral swap agreements with SAARC central banks, who want to avail swap facility,” the central bank said in a circular.

Under the framework for 2019-22, the RBI will continue to offer a swap arrangement within the overall corpus of USD 2 billion.

The drawals can be made in US dollar, euro or Indian rupee.

The framework provides certain concessions for swap drawals in Indian rupee, the RBI said.

The facility will be available to all SAARC member countries, subject to their signing the bilateral swap agreements, it added. The framework is valid from November 14, 2019 to November 13, 2022.

South Asian Association for Regional Cooperation (SAARC) member countries are—Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.