CURRENT 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: -The Reserve Bank of India (RBI) has signed a Currency Swap Agreement with the Maldives Monetary Authority (MMA) under the SAARC Currency Swap Framework. This is to provide swap support as a backstop line of funding for short term foreign exchange liquidity requirements.

Detailed explanation-3: -What is a Currency Swap Contract? A currency swap contract (also known as a cross-currency swap contract) is a derivative contract between two parties that involves the exchange of interest payments, as well as the exchange of principal amounts in certain cases, that are denominated in different currencies.

Detailed explanation-4: -What is a Dollar–Rupee Swap auction? In a Dollar–Rupee buy/sell swap, the central bank purchases dollars (US dollars or USD) from banks in exchange for Indian Rupees (INR) and then immediately enters into an opposite agreement with banks agreeing to sell dollars at a later date.