CURRENT AFFAIRS

Detailed explanation-1: -Sri Lanka signed a 10 billion yuan (about $1.5 billion) currency swap deal with China for a three-year period to be used for promoting bilateral trade and direct investment between the two countries, the Central Bank of Sri Lanka announced in March last year.

Detailed explanation-2: -WHAT IS THE SWAP DEAL ABOUT? The swap deal is an agreement with a three (3) year tenor which allows both the CBN and PBoC to swap a maximum amount of Fifteen Billion Renminbi/Chinese Yuan (CNY 15 Billion) for Seven Hundred and Twenty Billion Naira (NGN 720 Billion).

Detailed explanation-3: -COLOMBO, Dec 29 (Reuters) - Sri Lanka has raised its official foreign exchange reserves to around $3.1 billion, helped by a currency swap agreement with China, sources said on Wednesday, as the South Asian country seeks to shore up its battered finances and credit ratings.

Detailed explanation-4: -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-5: -A currency swap is an agreement in which two parties exchange the principal amount of a loan and the interest in one currency for the principal and interest in another currency. At the inception of the swap, the equivalent principal amounts are exchanged at the spot rate.