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India has approved withdrawal of Rs 30 billion for the Maldives under the SAARC Currency Swap Framework, the Indian High Commission in Male said on Thursday, reaffirming New Delhi's role as a key financial partner for its island neighbour.
The drawdown comes on the same day that Maldives settled a $400 million swap facility availed in October 2024 under the US Dollar/Euro Swap Window of the bilateral agreement between the Reserve Bank of India and the Maldives Monetary Authority. The settlement reflects the Maldives government's commitment to meeting its financial obligations, the Maldives Foreign Ministry said. 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'. The agreement was 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 support the government's broader strategy to reinforce economic stability amid the evolving situation in West Asia. The INR Swap Window under the framework includes favourable terms aimed at improving accessibility and effectiveness for the recipient country. Since the inception of the SAARC Swap Framework in 2012, the RBI has extended aggregate swap support worth $1.1 billion to the Maldives. The Indian High Commission noted that the currency swap arrangement has become an important element in ensuring financial stability for the Maldives, particularly during periods of external economic pressure. The Indian High Commission reiterated that the Maldives remains a vital 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 India's continued support, calling the approval of the RS 30 billion swap facility a testament to the enduring partnership between the two countries. It also underscored New Delhi's commitment to regional financial cooperation through the SAARC framework. The currency swap arrangement allows the Maldives to access foreign exchange in times of liquidity stress without relying solely on commercial borrowings, helping it manage balance-of-payment pressures and maintain macroeconomic stability. For India, the facility is part of a broader strategy to strengthen economic ties with South Asian neighbours and counterbalance growing external influence in the region. Officials in Male said the latest swap will provide immediate relief to the country's foreign exchange reserves and support its efforts to stabilise the economy as global uncertainties persist. With West Asia facing renewed geopolitical volatility, the timely assistance is seen as crucial for maintaining investor confidence and ensuring smooth external payments. (ANI)
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