Currency Swap arranges for Exporters!
Currency
Swap Arrangement for
SAARC
Member Countries approved!
Standby
Swap of USD 400 million
The
Union Cabinet, chaired by the Prime Minister Shri Narendra Modi has given ex-post
facto approval for amendment to the 'Framework on Currency Swap Arrangement for
SAARC Member Countries' to incorporate a 'Standby Swap' amounting to USD 400
million operated within the overall size of the Facility of USD 2 billion and
build in flexibility with respect to modalities of its operation, such as
period of swap, roll over, etc. after due consideration of conditions of
requesting SAARC member countries and domestic requirements of India.
Due
to heightened financial risk and volatility in global economy, short term swap
requirements of SAARC countries could be higher than the agreed lines. The
incorporation of 'Standby Swap' within the approved SAARC Swap Framework would
provide necessary flexibility to the Framework and would enable India to
provide a prompt response to the current request from SAARC member countries
for availing the swap amount exceeding the present limit prescribed under the
SAARC Swap Framework.
Cabinet
approved the Framework on Currency Swap Arrangement for SAARC Member Countries
on March 1, 2012 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.
Under
the Facility, RBI offers swaps of varying sizes in USD, Euro or INR to each
SAARC member country depending on their two months import requirement and not
exceeding US$ 2 billion in total. The swap amount for each country has been
defined in the above Facility, subject to a floor of USD 100 Million and a
maximum of USD 400 Million. Each Drawal will be for three months tenor and upto
maximum of two rollovers.
RBI
will negotiate the operational details bilaterally with the Central Banks of
the SAARC countries availing the Standby Swap.
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