BANKING AFFAIRS

Detailed explanation-1: -The SAARC currency swap facility came into operation on 15th November, 2012. The RBI can offer a swap arrangement within the overall corpus of USD 2 billion. The swap drawals can be made in US dollar, euro or Indian rupee. The framework provides certain concessions for swap drawals in Indian rupee.

Detailed explanation-2: -28, 2022). The Bank of Japan, acting as agent for the Minister of Finance of Japan, and the Reserve Bank of India signed the Amendment and Restatement Agreement of the BSA. The BSA is a two-way arrangement where both authorities can swap their local currencies in exchange for the US Dollar.

Detailed explanation-3: -The term swap means exchange. Under this agreement, two contracting countries loan each other a specified amount in local currencies or any major currency. The parties agree to swap back this amount at a specified date. It uses the same exchange rate as agreed initially.

Detailed explanation-4: -Since the financial crisis of 2007, central banks around the world have entered into a multitude of bilateral currency swap agreements with one another. These agreements allow a central bank in one country to exchange currency, usually its domestic currency, for a certain amount of foreign currency.