Current Affairs
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Currency Swap Arrangement

  • Posted By
    10Pointer
  • Categories
    Economy
  • Published
    27th Jul, 2020
  • The Reserve Bank of India has agreed to a $400 million currency swap facility for Sri Lanka till November 2022.
  • CSA is an arrangement between two friendly countries to involve in trading in their own local currencies.
  • As per the arrangements, both countries pay for import and export trade at the pre-determined rates of exchange, without bringing in third country currency like the US Dollar.
  • In such arrangements no third country currency is involved, thereby eliminating the need to worry about exchange variations.
  • Bring down the cost of capital for Indian entities while accessing the foreign capital market.
  • Aids in bringing greater stability to foreign exchange and capital markets in India.

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