India Approves ₹30 bn for Maldives Under SAARC Swap

• India approves ₹30 billion swap support for Maldives
• Funds provide liquidity relief and strengthen forex reserves
• Move reinforces India’s regional economic and strategic role

India has approved a ₹30 billion withdrawal for the Maldives under the SAARC Currency Swap Framework, reinforcing its role as a key financial partner to the island nation amid ongoing economic pressures. The move represents the first drawdown under the current swap arrangement signed between the Reserve Bank of India (RBI) and the Maldives Monetary Authority during President Mohamed Muizzu’s visit to New Delhi.

The funding comes at a crucial time for the Maldives, which is navigating foreign exchange constraints and external economic challenges. The ₹30 billion facility is being extended under the Indian rupee swap window of the SAARC framework, designed to provide short-term liquidity support without requiring immediate external borrowing.

Significantly, the approval coincides with the Maldives settling an earlier $400 million swap facility that it had availed in October 2024. The repayment underscores the country’s efforts to maintain financial discipline while continuing to rely on India’s support to stabilise its economy.

Also Read: India Deepens Gulf ties as Doval Meets Saudi Leaders

The SAARC Currency Swap Framework, operational since 2012, enables member countries to access foreign exchange liquidity during periods of stress. Over the years, India has extended cumulative support of around $1.1 billion to the Maldives under this mechanism, highlighting the depth of financial cooperation between the two nations.

Officials indicated that the latest swap will help bolster the Maldives’ foreign exchange reserves, support external payment obligations, and maintain macroeconomic stability amid global uncertainties, including geopolitical tensions affecting tourism and energy costs.

Strategically, the move aligns with India’s “Neighbourhood First” policy and its broader objective of strengthening regional economic resilience. By extending timely financial assistance, India continues to position itself as a reliable partner in South Asia, while also reinforcing its geopolitical influence in the Indian Ocean region.

Overall, the ₹30 billion swap approval reflects both immediate economic support and long-term strategic engagement, ensuring that the Maldives can navigate short-term liquidity challenges while sustaining bilateral cooperation with India.