Reserve Bank of India signs currency swap agreement with Sri Lanka

The Reserve Bank of India (RBI) signed an agreement with the Central Bank of Sri Lanka which will enable the latter to withdraw up to $400mn in US Dollars or Euros.
•    The Central Bank of Sri Lanka can make drawals of US Dollar or Euro in multiple tranches up to a maximum of USD 400 million or its equivalent.
•    The agreement will be valid for three years and is expected to further economic co-operation between the two countries, the statement said, adding that it will also further financial stability in the region.
•    The swap arrangement is intended to provide a backstop line of funding for countries that are part of the South Asian Association for Regional Cooperation (SAARC) to meet any balance of payments and liquidity crises till long-term arrangements are made.
•    In May 2012, RBI announced in the SAARCFINANCE Governor's meeting in Nepal, that it would offer swap facilities aggregating USD 2 billion, both in foreign currency and rupee to SAARC member countries.