India approves ₹30 billion for Maldives under SAARC swap
New Delhi: India has approved the withdrawal of Rs 30 billion for the Maldives under the South Asia Association for Regional Cooperation (SAARC) Currency Swap Framework, the Indian High Commission in Malé announced on Thursday, reaffirming New Delhi’s role as a key financial partner to the island nation.
The approval coincides with the Maldives settling a $400 million swap facility it had availed in October 2024 under the U.S. Dollar/Euro Swap Window of a bilateral agreement between the Reserve Bank of iNdia and the Maldives Monetary Authority. The Maldives Foreign Ministry said the repayment reflects the government’s commitment to meeting its financial obligations.
The Rs 30 billion facility has been released under the INR Swap Window of the ‘Framework on Currency Swap Arrangement for SAARC Countries, 2024–2027’, an agreement signed between the RBI and the MMA during President Mohamed Muizzu’s state visit to New Delhi in October 2024.
According to the Maldives Foreign Ministry, the facility will bolster the country’s broader strategy to maintain economic stability amid evolving geopolitical conditions in West Asia. The INR Swap Window offers favourable terms designed to improve accessibility and effectiveness for the recipient country.
Since the SAARC Swap Framework inception in 2012, the Reserve Bank of India (RBI) has extended total swap support of $1.1 billion to the Maldives. The Indian High Commission noted that such arrangements have played a crucial role in maintaining the country’s financial stability, especially during periods of external economic pressure.
Reiterating its commitment, the High Commission said the Maldives remains a key partner under India’s ‘Neighbourhood First’ policy and Vision MAHASAGAR. India, as a friendly neighbour, has always been the ‘first responder’ for the Maldives,” the statement said.
The Maldives Foreign Ministry welcomed the assistance, calling it a reflection of the strong and enduring partnership between the two nations, as well as India’s continued commitment to regional financial cooperation through the SAARC framework.
The currency swap arrangement enables the Maldives to access foreign exchange during liquidity stress without relying heavily on commercial borrowing. This helps manage balance-of-payment pressures and sustain macroeconomic stability. For India, the initiative is part of a broader strategy to deepen economic ties in South Asia and maintain regional influence.
Officials in Malé said the latest swap will provide immediate relief to foreign exchange reserves and aid efforts to stabilise the economy amid ongoing global uncertainties. With rising geopolitical tensions in West Asia, the timely assistance is expected to boost investor confidence and ensure smooth external payments.
(DD News)
