New Delhi [India], December 17 : A day after the commerce ministry released trade data for November showing the highest-ever trade deficit of USD 37.8 billion. The Ministry of Finance highlighted the various initiatives taken by the ministry this year to boost trade with other countries.
The ministry stated that this year it gave approval to the 'Framework on Currency Swap Arrangement for SAARC Countries 2024-27' on June 19, 2024. This framework marks a significant step towards enhancing economic cooperation and financial stability within the South Asian region.
In a social media post, the ministry said "Currency Swap Arrangement is designed to strengthen economic ties and provide financial stability within the SAARC region, helping member countries manage their foreign exchange needs more effectively".
The newly approved framework replaces the earlier 'Framework on Currency Swap Arrangement for SAARC Countries 2019-22', which had been in place to support short-term foreign exchange requirements of SAARC nations.
The ministry also noted that the key feature of the new arrangement is the introduction of a dedicated INR Swap Window worth Rs 25,000 crore. This is in addition to the existing USD/Euro Swap Window of USD 2 billion, providing SAARC nations the option to access funding in Indian Rupees.
The move is aimed at promoting the internationalisation of the Indian Rupee and encouraging greater usage of Indian Rupees in regional trade and financial transactions.
The SAARC Currency Swap Framework, which was first established in 2012, plays an essential role in providing short-term liquidity support to member countries during times of economic stress.
Recognised as part of the Global Financial Safety Net, the arrangement reflects India's commitment to strengthening economic ties with SAARC nations and promoting regional integration and interdependence.
The Finance Ministry emphasised that the new framework will not only help SAARC nations meet their foreign exchange requirements but also reinforce India's position as a key partner in the region.
By offering both Indian Rupees and foreign currency swap options, the initiative is expected to boost trade and financial cooperation among SAARC countries while further solidifying India's economic leadership in South Asia.
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