RBI Enters Currency Swap Agreement With Maldives

The Reserve Bank of India announced on Monday that it has signed a currency swap agreement with the Maldives Monetary Authority as part of the SAARC Currency Swap Framework for 2024-27. This agreement allows the MMA to access financing support from the RBI amounting to $400 million through the US Dollar/Euro Swap Window and approximately Rs 3,000 crore via the INR Swap Window.

The arrangement is set to remain in effect until June 18, 2027.

The SAARC Currency Swap Framework, which has been operational since November 15, 2012, aims to provide a safety net for countries facing short-term foreign exchange liquidity issues or balance of payments difficulties while they arrange longer-term solutions.

During this significant period, Indian Prime Minister Narendra Modi and Maldivian President Mohamed Muizzu, who is on a four-day state visit, also unveiled the Rupay card in the Maldives and inaugurated a new runway at Hanimadhoo International Airport.

The RuPay card, created by the National Payments Corporation of India, is India's first domestic card payment network, offering extensive acceptance across ATMs, point-of-sale terminals, and e-commerce platforms, both in India and in various countries worldwide.

Established in 2008 through a collaboration between the Reserve Bank of India and the Indian Banks’ Association, NPCI serves as the umbrella organization for India's retail payments and settlement systems.

The RuPay card aligns with the RBI's vision of promoting a ‘less cash’ economy. NPCI oversees multiple payment systems, including the National Financial Switch (ATM network), Unified Payments Interface, Bharat Bill Pay, BHIM, FASTag, and Immediate Payment Service, among others.

RuPay's international presence has grown significantly in recent years, with the card now accepted in several countries, including Bhutan, Singapore, the United Arab Emirates, Sri Lanka, Nepal, Mauritius, and the Maldives.

The discussions between the two leaders focused on enhancing bilateral relations, which had faced challenges over the past year.

(With inputs from PTI)