• The Union Cabinet gave its approval for the MoU between Reserve Bank of India (RBI) and Central Bank of United Arab Emirates (UAE) on co-operation concerning currency swap agreement.
• The Agreement was signed in February, 2016 during the official visit of Crown Prince of Abu Dhabi Sheikh Mohammed Bin Zayed Al Nahyan to India.
• The MoU commits that RBI and Central Bank of UAE will consider signing a bilateral Currency Swap Agreement on mutually agreed terms and conditions.
• The MoU will help to further strengthen the close economic cooperation and relationship between India and UAE.
• A currency swap involves exchange of principal and interest in one currency for the same in another currency.
• It is considered to be a foreign exchange transaction.
Reserve Bank of India is India's central banking institution, which controls the monetary policy of the Indian rupee. It commenced its operations on 1 April 1935 during the British Rule in accordance with the provisions of the Reserve Bank of India Act, 1934.