India approves proposal to extend Currency Swap Arrangement for SAARC nations
After approval of the cabinet, the RBI will negotiate the operational details of the Currency Swap Arrangement Framework bilaterally with central banks of the respective SAARC countries
Source: PIB, Government of India
The arrangement will further financial stability in the region, besides improving the standing and credibility of India among the SAARC countriesThe Union Cabinet chaired by the Prime Minister Narendra Modi has given approval for the proposal to provide a two year extension with amendments to the 'Framework on Currency Swap Arrangement for SAARC Member Countries' up to November 14, 2017, and extension thereafter, if necessary, by the Finance Minister.
Under the facility, the RBI offers swaps of varying sizes to each SAARC member countries (Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka) depending on their two months import requirement and not exceeding $2 billion in total, in USD, Euro or INR. In the 27th SAARC Finance Group Meeting held in Washington D.C 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 operationalsing the framework and with the intention to bring more clarity on the clauses of the framework. After approval of the cabinet, the RBI will negotiate the operational details bilaterally with central banks of the respective SAARC countries. These bilateral agreements would be signed by the RBI after obtaining prior government approval. Any amendment to the framework will require prior approval of the Finance Minister. The framework on Currency Swap Arrangement for SAARC member countries has enabled India to strengthen its ties with the SAARC countries. The arrangement will further financial stability in the region, besides improving the standing and credibility of India among the SAARC countries. The extension of currency swap facility to SAARC countries will strengthen regional integration and inter-dependence and also enhance India's economic influence in the region. Merely extending the validity of the framework arrangement has no financial implications. If any bilateral swap arrangement is signed, then, in the event of a draw down by either party/parties, the foreign exchange reserves with the RBI would be temporarily depleted up to a maximum amount of $2 billion. Interest would be paid by the receiving party on the USD/Euro/INR amount although no interest will be received on the domestic currency given in exchange thereof to the providing party. The "Framework on Currency Swap Arrangement for SAARC Member Countries" was approved by the government of India on March 1, 2012. The framework was formulated with the intention to provide a line of funding for short term foreign exchange requirements or to meet balance of payments crises till longer term arrangements are made or the issue is resolved in the short-term itself.
November 2015 | 6:21pm
The facilities will provide refrigerated container plug-in facilities for cold warehousing..
Read more
The imposition tariffs by Beijing are in response to the 25% on duty on steel and 10% on ..
Read more
The Government has permitted exports of white sugar until September 2018 under DFIA scheme..
Read more
to success.