RBI, Royal Monetary Authority of Bhutan ink currency swap pact

The Reserve Bank today signed a SAARC currency swap agreement with the Royal Monetary Authority of Bhutan (RMBA).
Under the arrangement, RMBA can make withdrawals of US dollar, euro and rupee in multiple tranches of up to a maximum of USD 100 million or its equivalent, RBI said in a release.
This is expected to further economic co-operation between the two countries, it added.
The agreement is valid for three years from the date of signing.
RBI also offers an aggregate amount of USD 2 billion both in foreign currency (USD and euro) and rupee to SAARC member countries -- Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka.

The swap arrangement is intended to provide a backstop line of funding for the SAARC member countries to meet any balance of payments and liquidity mismatches till longer term arrangements are made.
It is also offered to take care of short-term liquidity due to market turbulence.
The arrangement will thus improve financial stability in the region, RBI added.