Currency Swap Agreement With India

The Reserve Bank of India (RBI) has signed an agreement to extend a $400 million swap facility in Sri Lanka to increase foreign exchange reserves and ensure financial stability in the country hit hard by the COVID-19 pandemic. India and Japan signed a $75 billion bilateral currency exchange agreement in October 2018. In the midst of the global pandemic, the RBI has come out in favor of a currency swap agreement with the US Federal Reserve due to the increasing pressure on the Indian currency. The U.S. Federal Reserve grant will help India stabilize markets, reduce volatility and reduce pressure on the Indian rupee. The agreement signed under the saarc Currency Swap Framework 2019-22 would be valid until 13 November 2022. India already has a $75 billion bilateral swap line, with Japan having the second highest dollar reserves after China. Similarly, the RBI offers currency swap lines in the SAARC region, with a total corpus of $2 billion. Based on the conditions set out in the framework, the RBI would enter into bilateral swap agreements with ASARC central banks that wish to use a swap mechanism. Click here to read that Mint ePaperMint is now on Telegram. Join the mint channel in your telegram and stay up to date with the latest business news…