On October 7, 2024, the Reserve Bank of India (RBI) formalized a Currency Swap Agreement with the Maldives Monetary Authority (MMA) in New Delhi under the SAARC Currency Swap Framework for 2024-27. This agreement includes a $400 million currency swap and an additional ₹3,000 crore agreement aimed at enhancing the Maldives’ access to foreign currency.
During discussions, Prime Minister Narendra Modi and Maldivian President Muizzu also established a comprehensive economic and maritime security partnership, further strengthening bilateral ties. Under the terms of the agreement, the MMA will receive financial support from the RBI, amounting to $400 million through the U.S. Dollar/Euro Swap Window and ₹30 billion via the INR Swap Window. This agreement will remain valid until June 18, 2027.
The SAARC Currency Swap Framework, which has been operational since November 15, 2012, serves to provide short-term foreign exchange liquidity support and balance of payments assistance until longer-term arrangements are in place.
In addition to the currency agreement, Modi and Muizzu launched the RuPay card in the Maldives and virtually inaugurated the new runway at Hanimaadhoo International Airport. Modi expressed intentions to further connect India and the Maldives through the Unified Payments Interface in the future.
Muizzu, who is on his first visit to India since winning the presidential election last year, thanked the Indian government for its financial support. He emphasized the importance of the ₹3,000 crore assistance and the $400 million currency swap in addressing current foreign exchange challenges.
The discussions also included the potential for a Free Trade Agreement (FTA) and the establishment of Indian and Maldivian consulates in Addu and Bengaluru, respectively. This meeting marks a pivotal moment for relations between the two nations, especially following a rocky period last year.
