Cabinet approves amendment to Currency Swap Framework for SAARC countries

Due to heightened financial risk and volatility in the global economy, short term swap requirements of SAARC countries could be higher than the agreed lines.

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.

Salient features:

Due to heightened financial risk and volatility in the 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 the 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.

(With Inputs from PIB)