India to enter into bilateral Rupee swap agreements with SAARC countries: RBI

With the need to fund short-term foreign exchange liquidity requirements or balance of payment crises, the Reserve Bank of India on Thursday released the revised framework on currency swap arrangements with South Asian Association for Regional Cooperation (SAARC) countries for the period between 2024 to 2027.

"Under this Framework, the Reserve Bank would enter into bilateral swap agreements with SAARC central banks, who want to avail of the swap facility. The Currency Swap Facility will be available to all SAARC member countries, subject to their signing the bilateral swap agreements," said RBI in the statement.

Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka are part of the SAARC grouping.


As part of the revised framework for 2024-27, a separate Rupee Swap Window has been introduced with various concessions for swap support in Indian Rupee. The total corpus of the Rupee support is Rs 250 billion.

The RBI will continue to offer swap arrangements in US$ and Euro under a separate US Dollar/ Euro Swap Window with an overall corpus of US$ 2 billion.

The arrangements came into force on November 15, 2012 to provide a backstop line of funding for short-term foreign exchange liquidity requirements or balance of payment crises of the SAARC countries till longer term arrangements are made. Central banks around the world undertake currency swap agreements between themselves, which are aimed at financing a country’s dollar requirements.

In 2020, the US Federal Reserve announced a currency swap facility with the RBI. Currency swap facilities help countries gain access to dollars needed to pay for imports. The RBI has a framework in place for countries belonging to the South Asian Association for Regional Cooperation. Withdrawals are permitted within a certain limit and can be made in.

(more to come)