India signs $750-mn currency swap deal with forex-starved Maldives
(Source – The Hindu, International Edition – Page No. – 4)
| Topic: GS2 – International relations |
| Context |
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Analysis of the News
| Currency Swap Agreement |
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How this helps Maldives
- Foreign Exchange Stability: The swap agreement will help Maldives stabilise its foreign currency reserves, which are critically low, thus ensuring liquidity for international trade and payments.
- Economic Recovery: With increased access to foreign currency, the Maldives can manage its foreign debt repayments more effectively, aiding in long-term economic recovery.
- Boost Tourism: The agreement signals confidence in the Maldives’ economic stability, encouraging tourism—especially from India—one of its largest revenue sources.
- Infrastructure Development: The financial assistance and ongoing projects like the construction of homes and the airport runway will stimulate job creation and infrastructure growth.
- Strengthened Bilateral Ties: The agreement reaffirms India’s commitment as a reliable partner, offering not just financial support but also collaboration in security and trade sectors.
| Practice Question: Examine the evolving dynamics of India-Maldives relations in the context of recent engagements. How do these developments reflect India’s role as a “First Responder” in the region? (150 Words /10 marks) |
