India Approves Currency Swap Facility of ₹30 Billion for Maldives
India has granted a ₹30 billion currency swap facility to the Maldives, reinforcing bilateral ties and regional stability.
New Delhi, October 16 (Daily Kiran) : India has approved a request from the Maldives government to extend a currency swap facility worth ₹30 billion. This decision aligns with India’s “Neighborhood First” policy and underscores its commitment to strengthening bilateral relations with the island nation, as stated in an official announcement released on Friday.
The currency swap facility is part of a framework established for SAARC countries. It was signed during Maldivian President Mohamed Muizzu’s official visit to India in October 2024, between the Reserve Bank of India (RBI) and the Maldives Monetary Authority.
The initial amount of ₹30 billion was provided to the Maldivian government on April 23 of this year. Under this arrangement, the Maldives gains access to Indian rupees, which helps ensure cash availability and maintain financial stability when needed. For India, this ongoing financial support is a vital component of its broader relations with the strategically important neighbor in the Indian Ocean.
The bilateral currency swap framework for 2024-27 includes concessional terms, such as favorable interest rates and other benefits. Since the framework’s inception in 2012, the RBI has provided over $1.1 billion in swap assistance to the Maldives.
India has also supported the Maldives through investments in government securities, purchasing two long-term treasury bonds worth $250 million and $100 million, respectively. Additionally, the Maldives has repaid $150 million for three treasury bills acquired by India, with the Indian government covering $42.8 million in interest on these securities.
This currency swap facility, along with India’s investments in treasury bonds and bills, has played a crucial role in bolstering the Maldives’ financial stability. This latest decision reflects India’s ongoing efforts to strengthen economic and strategic ties with the Maldives.
The statement highlighted that the Maldives holds a special position in India’s “Neighborhood First” policy and its “Ocean” vision for mutual and comprehensive advancement in security and development.
India remains committed to deepening bilateral relations with the Maldives, which includes implementing a “comprehensive economic and maritime security partnership” agreed upon during President Muizzu’s visit to India in October 2024.
