RBI Introduces Rs 250 Billion INR Swap Window for SAARC Countries

The Reserve Bank of India has introduced a new Rs 25,000 crore INR Swap Window with concessions for SAARC countries. Accompanied by a USD and Euro swap arrangement, this framework aims to aid short-term foreign exchange liquidity needs for SAARC nations, valid until 2027.

In a significant move aimed at bolstering financial cooperation, the Reserve Bank of India unveiled a Rs 25,000 crore INR Swap Window on Thursday, featuring several concessions to support the Indian Rupee for SAARC countries. The central bank also retains a USD and Euro swap window with a $2 billion corpus.

The newly announced SAARC Currency Swap Framework for 2024-27 allows nations to access up to Rs 250 billion to meet their short-term foreign exchange liquidity needs. The facility essentially provides a critical financial backstop for member countries like Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka, contingent on bilateral agreements.

Started in 2012, the SAARC Currency Swap Facility was designed to be a temporary line of funding for immediate liquidity or balance of payment crises. With the new framework, the RBI aims to strengthen financial stability within the region, ensuring smoother economic coordination and support until 2027.

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