India backs Maldives with Rs 30 billion SAARC currency swap

In a move reinforcing regional financial cooperation, India has approved a drawdown of Rs 30 billion for Maldives under the SAARC Currency Swap Framework, the Indian High Commission in Malé said on Thursday. The development underscores New Delhi’s continued role as a key financial partner to its island neighbour.The approval coincides with the Maldives settling a $400 million swap facility availed in October 2024 under the US Dollar/Euro Swap Window of a bilateral agreement between the Reserve Bank of India and the Maldives Monetary Authority. The Maldives Foreign Ministry stated that the repayment reflects the government’s commitment to meeting its external financial obligations.
The Rs 30 billion support has been extended under the INR Swap Window of the ‘Framework on Currency Swap Arrangement for SAARC Countries, 2024–2027’. The agreement was formalised during President Mohamed Muizzu’s state visit to New Delhi in October 2024.According to Malé, the latest facility will bolster the country’s efforts to maintain economic stability amid evolving geopolitical conditions, particularly in West Asia. The INR swap window offers favourable terms designed to improve liquidity access and enhance the effectiveness of financial support mechanisms.
Since the inception of the SAARC Swap Framework in 2012, the RBI has extended cumulative support of around $1.1 billion to the Maldives. Officials highlighted that the arrangement has played a crucial role in safeguarding the country’s financial stability, especially during periods of external economic stress.Reaffirming bilateral ties, the Indian High Commission noted that the Maldives remains a key partner under India’s ‘Neighbourhood First’ policy and Vision MAHASAGAR. It added that India continues to act as a “first responder” in times of need.Welcoming the development, the Maldives Foreign Ministry described the approval as a testament to the enduring partnership between the two nations and a reflection of India’s commitment to strengthening regional financial cooperation through the South Asian Association for Regional Cooperation framework.
The currency swap mechanism enables the Maldives to access foreign exchange during liquidity constraints without depending heavily on commercial borrowings. This helps manage balance-of-payment pressures and supports macroeconomic stability. For India, such initiatives are part of a broader strategy to deepen economic engagement in South Asia while countering rising external influence in the region.Officials in Malé said the latest support will provide immediate relief to foreign exchange reserves and aid ongoing efforts to stabilise the economy amid global uncertainties, thereby sustaining investor confidence and ensuring smooth external payments.