29) Currency Swap facility

Question 1

With whom has RBI now swapped currency ?

Answer 1

Srilanka under SAARC currency swap framework

Question 2

Explain currency swap facility ?

Answer 2

Under this, country provides dollars to a foreign central bank which at the same time provides equivalent funds in its currency to the former based on the market exchange rate at the time of transaction

Question 3

Is interest applicable here ?

Answer 3

YESSS

Question 4

While returning back what exchange rate is considered ?

Answer 4

The value of $ at the time of transaction and not at the time of repayment