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With reference to the currency swap, consider the following statements:
1. RBI has a framework under which it can offer credit swap facilities to SAARC countries within an overall corpus of $2 billion.
2. The SAARC currency swap facility came into operation in 2020.
Which of the statements given above is/are correct?
  • a)
    1 only
  • b)
    2 only
  • c)
    Both 1 and 2
  • d)
    Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
With reference to the currency swap, consider the following statements...
Bangladesh’s central bank has approved a $200 million currency swap facility to Sri Lanka, , which will help Colombo tide over its foreign exchange crisis.
  • A currency swap is effectively a loan that Bangladesh will give to Sri Lanka in dollars, with an agreement that the debt will be repaid with interest in Sri Lankan rupees. For Sri Lanka, this is cheaper than borrowing from the market, and a lifeline as is it struggles to maintain adequate forex reserves even as repayment of its external debts looms. The period of the currency swap will be specified in the agreement.
  • This may be the first time that Bangladesh is extending a helping hand to another country, so this is a landmark of sorts.
  • It is also the first time that Sri Lanka is borrowing from a SAARC country other than India.
  • India-Sri Lanka relations have been tense over Colombo’s decision to cancel a valued container terminal project at Colombo Port.
  • Last July, the Reserve Bank of India did extend a $400 million credit swap facility to Sri Lanka, which Central Bank of Sri Lanka settled in February. The arrangement was not extended.
  • RBI has a framework under which it can offer credit swap facilities to SAARC countries within an overall corpus of $2 billion. the SAARC currency swap facility came into operation in November 2012.
  • Hence only statement 1 is correct.
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With reference to the currency swap, consider the following statements:1. RBI has a framework under which it can offer credit swap facilities to SAARC countries within an overall corpus of $2 billion.2. The SAARC currency swap facility came into operation in 2020.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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With reference to the currency swap, consider the following statements:1. RBI has a framework under which it can offer credit swap facilities to SAARC countries within an overall corpus of $2 billion.2. The SAARC currency swap facility came into operation in 2020.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? for Current Affairs 2024 is part of Current Affairs preparation. The Question and answers have been prepared according to the Current Affairs exam syllabus. Information about With reference to the currency swap, consider the following statements:1. RBI has a framework under which it can offer credit swap facilities to SAARC countries within an overall corpus of $2 billion.2. The SAARC currency swap facility came into operation in 2020.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Current Affairs 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to the currency swap, consider the following statements:1. RBI has a framework under which it can offer credit swap facilities to SAARC countries within an overall corpus of $2 billion.2. The SAARC currency swap facility came into operation in 2020.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?.
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