The currency swap UPSC topic is given in this article for all those aspirants who want to fetch the highest scores in the exam and achieve their destination. The currency swap is nothing but the exchange of money. It is done between two countries like an agreement.
To know all the details about these UPSC notes, you have to thoroughly read the article till the end. You need to grasp the most magnificent information in the UPSC preparation and make notes of it to revise it before the UPSC exam.
You can crack this paper with the right amount of knowledge, wisdom, information, and technique which can be learned during the preparation phase. You have the nicest opportunity right now to get one step ahead of many candidates by knowing about this concept precisely. So, let’s begin with the significant information right now and achieve the target immediately.
Currency Swap UPSC
The currency swap is a term given to the exchange of currencies between two countries. This swap is like a contract or agreement where two countries exchange currencies with predetermined and documented terms and conditions.
If you are a UPSC aspirant, you should be aware that the recent currency swap has been done between Bangladesh and Sri Lanka. Bangladesh made the currency swap by clearing USD 200 million. This currency swap facility is done prominently for Sri Lanka so that the country can get some help to boost its economy.
The Bangladesh and Sri Lanka swapping is more like a loan where Bangladesh has given the loan to Sri Lanka in dollars and the latter will have to pay the amount with interest in the Sri Lankan currency. It is a professional agreement made to boost the economy of the country.
The currency swap is done majorly in the situations where the financial liquidity happens to a country to avoid BOP which is a balance of payments. In the case of Sri Lanka, it is easier for the nation than to borrow money from the market.
The reason behind this convenience is that borrowing from the market will give struggles to the nation to maintain adequate forex reserves including the repayment of its external debts looms.
This topic is tremendously crucial for the UPSC exam. You must get all the points related to the concept so that you not only perform well in the examination but also you can get knowledgeable for the future.
This currency swapping is unusual for Bangladesh because the nation has never been seen as the financial provider to some other countries in the past. Bangladesh has been seen among the most impoverished countries of the world and has always received billions of dollars as financial aid from different nations and organizations.
You need to know that Bangladesh is the fastest growing country in South Asia and has developed its economy hugely in the last two decades. The per capita income of the country has overtaken India’s income and has taken a majority of the population out of poverty with continuous efforts. It is a landmark for the country to help other countries financially.
Are you worried about your UPSC exam? Well, every candidate gets worried about this exam as it is the toughest one in the country. However, you can ace the paper with perfect knowledge and understanding. If you have read the above points about the currency swap UPSC, you must now know the contribution of India. The president of Sri Lanka has asked for a 1 billion USD swap with India in 2020.
Moreover, the country also asked for a moratorium. This moratorium was asked on debts that Sri Lanka has to repay to India. India put off the decision to help the nation with a currency swap because the relations of both nations were tense.
The relations were not good because Colombo decided to cancel a valued container terminal project at Colombo Port. Furthermore, India has projected the hands of help for Sri Lanka in July 2020 by providing a facility of currency swap of USD 400 million.
This was done by the RBI, Reserve Bank of India. The agreement was not extended and the swap settlement was done successfully in February. These points are crucial for you to acknowledge and remember so that you can be magnificent in serving the nation after cracking the paper.
The complete article has all the information related to the currency swap UPSC. If you require more information related to the UPSC notes or any section of the UPSC exam, you should select the best option for the guidance and resolutions that are UPSC Pathshala.
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