The Reserve Bank of India has signed a Currency Swap Agreement with the Maldives Monetary Authority (MMA) to enable MMA to make drawls in multiple tranches up to a maximum of $200 million from the RBI.
This agreement has been signed under the SAARC Currency Swap Framework.
“This is to provide swap support as a backstop line of funding for short-term foreign exchange liquidity requirements,” RBI said in a statement.
To further financial stability and economic cooperation within the SAARC region, the RBI, with the concurrence of the Government of India, put in place a revised Framework for Currency Swap Arrangements in 2019 for SAARC countries.
In 2020, the RBI signed a similar pact for extending up to $400-million currency swap facility to Sri Lanka.
Image courtesy: Money Control