India has approved the request of the Maldives government for the rollover of a Rs 30 billion currency swap facility as part of New Delhi’s ‘Neighbours First’ policy and the commitment to deepening bilateral relations with the island nation, according to an official statement issued on Friday.
The facility is being extended under the Framework on Currency Swap Arrangement for SAARC countries, signed between the Reserve Bank of India (RBI) and the Maldives Monetary Authority during Maldivian President Mohamed Muizzu’s state visit to India in October 2024.
The first drawdown of Rs 30 billion was extended to the Maldivian government on April 23 this year.
The currency swap arrangement provides the Maldives with access to Indian rupees, helping support liquidity and financial stability when needed. For India, continued financial assistance also forms part of its broader engagement with a strategically important Indian Ocean neighbour.
Under the 2024–27 framework, the bilateral currency swap arrangement provides concessions, including favourable interest rates and other conditions. Since the framework was introduced in 2012, the RBI has provided aggregate swap support of more than $1.1 billion to the Maldives.
India has also supported the Maldives through investments in government securities. It subscribed to two long-term treasury bonds worth $250 million and $100 million. In addition, three treasury bills worth $150 million subscribed by India have been settled by the Maldives, with the Indian government paying $42.8 million in interest incurred on the securities.
The currency swap facility and its subscriptions to Maldivian treasury bonds and bills have played an important role in supporting the country’s financial stability.
The latest decision comes against the backdrop of India’s broader efforts to deepen economic and strategic ties with the Maldives.
Maldives holds a special place under India’s Neighbourhood First Policy and its MAHASAGAR vision — Mutual and Holistic Advancement for Security and Growth Across Regions. India is also committed to deepening the bilateral relationship with the Maldives, including by implementing the Joint Vision for a Comprehensive Economic and Maritime Security Partnership, adopted during Muizzu’s visit in October 2024, the statement added.
