The Reserve Bank of India today signed a “Special Currency Swap Agreement” with the Central Bank of Sri Lanka. The deal allows Sri Lanka to withdraw up to $1.1 billion for a maximum period of six months.
The new agreement is in addition to the existing Framework on Currency Swap Arrangement for members of the SAARC regional bloc.
In March the RBI signed a currency swap agreement with Sri Lanka, worth $400mn and valid for three years.
The swap arrangements are intended to provide a backstop line of funding for countries that are part of the South Asian Association for Regional Cooperation (SAARC) to meet any balance of payments and liquidity crises till long-term arrangements are made.
In May 2012, RBI announced in the SAARCFINANCE Governor's meeting in Nepal, that it would offer swap facilities aggregating USD 2 billion, both in foreign currency and rupee to SAARC member countries.
Reserve Bank of India signs currency swap agreement with Sri Lanka (31 March 2015)
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