CURRENT AFFAIRS

Detailed explanation-1: -RBI Signs Currency Swap Agreement with Maldives Monetary Authority. The Reserve Bank of India has signed a Currency Swap Agreement with the Maldives Monetary Authority (MMA).

Detailed explanation-2: -Since 2018, India has agreed to sign currency swaps with 23 countries.

Detailed explanation-3: -Currency swaps are financial contracts between two parties to exchange a specific amount of one currency for an equivalent amount of another currency. The purpose of currency swaps is to reduce currency risk, achieve lower financing costs, or gain access to a foreign currency.

Detailed explanation-4: -In a Dollar–Rupee buy/sell swap, the central bank buys dollars (US dollars or USD) from banks in exchange for Indian Rupees (INR) and immediately gets into an opposite deal with banks promising to sell dollars at a later date.