RBI announces new currency swap framework for SAARC for 2019-22
27 November 2019
Reserve Bank of India has decided to put in place a revised framework on currency swap arrangement for SAARC countries 2019-2022, with a view to further financial stability and economic cooperation within the SAARC region.
The revised framework set up with the concurrence of the Government of India, is valid from 14 November 2019 to 13 November 2022. 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 of currency swap facility.
The SAARC Currency Swap Facility came into operation on 15 November 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.
Under the Framework for 2019-22, RBI will continue to offer swap arrangement within the overall corpus of $2 billion. The drawals can be made in US dollar, Euro or Indian rupee. The Framework offers certain concessions for swap drawals in Indian rupee.
The Currency Swap Facility will be available to all SAARC member countries, subject to their signing the bilateral swap agreements.