Concept:The SAARC Currency Swap Framework is a financial mechanism where India, through the RBI, provides foreign exchange swaps to SAARC member countries to address short-term liquidity and balance of payments problems, thereby enhancing regional economic stability.
Explanation:In 2024, India introduced the SAARC Currency Swap Framework for the period 2024–27.
This framework allows eligible SAARC nations to swap their local currency for US dollars or Indian rupees.
The Reserve Bank of India (RBI) manages this facility on behalf of the Government of India.
It provides up to USD 2 billion in swap arrangements to member countries facing a foreign exchange crisis or BoP imbalances.
The framework was initially launched in 2012 and has been renewed periodically.
This initiative strengthens financial stability in the region and demonstrates India’s leadership role in supporting its neighbours.
The other options—Expansion of SAARC Development Fund, SAARC Trade Protection Scheme, and SAARC Joint Credit Reserve—are not the correct financial mechanism introduced in 2024.
Answer:SAARC Currency Swap Framework (2024–27)