Government extends currency swap facility for SAARC members

The government extended the currency swap facility for SAARC members, under which the RBI offers the facility of varying sizes not exceeding $2 billion in total.

• The decision was taken by the Union Cabinet chaired by Prime Minister Narendra Modi.

Under the facility, RBI offers swaps of varying sizes to each SAARC member country (Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka) depending on their two months import requirement and not exceeding USD 2 billion in total, in US dollar, Euro or domestic currency.

• These bilateral agreements would be signed by RBI after obtaining prior government approval.
• In the 27th SAARC Finance Group meeting held in Washington on October 9, 2013, the Central Bank Governors of the SAARC member nations approved certain amendments made to the framework based on the experience gained from operationalizing the framework and with the intention to bring more clarity on the clauses of the framework.