India`s monetary agreement with countries in the South Asian region would ease the difficult economic situation of some countries and strengthen economic cooperation, which is so important to cope with the difficult conditions of the COVID 19 pandemic. The agreement, valid until November 13, 2022, was signed as part of the South Asian Association for Regional Cooperation (SAARC) Currency Swap Framework 2019-22, the RBI said in a statement. While countries in the South Asian region are taking steps to combat COVID-19, currency swaps have proven to be an important instrument of economic cooperation in the region, writes Partha Pratim Mitra for South Asia Monitor The agreement signed under the SAARC Currency Swap 2019-22 would be valid until 13 November 2022. , 2012, to provide a backstop financing line for short-term liquidity needs or short-term balances of payments, until longer-term arrangements are made. As part of 2019-22, the Central Bank will continue to offer swap agreements totalling $2 billion. The COVID-19 epidemic has significantly weakened Sri Lanka`s economic prospects. The current account deficit is expected to narrow to 2.2% of GDP in 2019, due to a decline in imports despite the slowdown in tourism revenues. The issuance of international government bonds ($4.4 billion) contributed to the debt repayment. However, reserves are low compared to short-term foreign debt. The exchange rate remained broadly stable in March and April 2020, despite the downward pressure. However, the fiscal parameters deteriorated in 2019. Tax revenues declined due to low collection of VAT, excise duties and import taxes. Meanwhile, spending has also increased as a result of aid measures and the implementation of expansionary budget proposals.
As a result, the budget deficit increased to 6.8% of GDP. The central government`s debt ratio is high (87%), with more than half of the debt denominated in foreign currency. The international rating agencies Fitch and S-P Global Ratings have revised Sri Lanka`s outlook from stable to negative due to increased risks to debt sustainability. India and its role in the 400 million currency swap with Sri Lanka, Indian Express, NewDelhi, 26 July 2020 p. 12 For prelims and hands: importance, importance and implications of the re-eding swap. India is working with the United States to secure a dollar swap line. In these agreements, there is no currency from a third country, which eliminates the need to be concerned about exchange rate fluctuations. The Reserve Bank of India (RBI) has decided to intensify economic cooperation within the member countries of the South Asian Regional Cooperation Association (SAARC) and the framework for currency exchange agreements was revised on Tuesday 26 November 2019. The currency exchange mechanism for SAARC member states came into force on 15 November 2012. The last one.
The Reserve Bank of India (RBI) and the Bank of Japan have signed a bilateral swap agreement. The agreement was negotiated during Prime Minister Narendra Modi`s visit to Tokyo last year. Bilateral Swap Agreement The swap agreement will give India access to $75 billion against the $50 billion of the former BSA. Under.. It is an agreement between two friendly countries that have regular, substantial or increasingly frequent exchanges to act mainly in their own local currencies, where import and export exchange rates are paid at pre-established exchange rates, without introducing third-country currencies such as the US dollar. Topics: Bangladesh – Bhutan – Currency Swap, Maldives – RBI – Reserve Bank of India – Rupees – SAARC – Srilanka – U.S. dollar As part of 2019-22, the RBI will continue to propose a swap agreement totalling $2 billion. Following the COVID-19 outbreak in the region, India had proposed a virtual meeting to discuss Sri Lanka`s application for exemption from its external debt front.