CURRENT AFFAIRS

Detailed explanation-1: -India extends duration of $400 million currency swap facility with Sri Lanka - The Hindu.

Detailed explanation-2: -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-3: -A foreign currency swap is an agreement between two foreign parties to swap interest payments on a loan made in one currency for interest payments on a loan made in another currency. A foreign currency swap can involve exchanging principal, as well. This would be exchanged back when the agreement ends.

Detailed explanation-4: -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-5: -Why do countries opt for currency swaps? These swaps allow the countries to get a loan at a lower rate of interest than the foreign markets. Also, it helps the recipient country to maintain their foreign reserves even as other foreign debt obligations loom large.