CII Held a conference on Driving South Asia Economic Integration in New Delhi

A conference with an aim to build up interest in South Asian economies, Confederation of Indian Industry (CII) organised a conference named “Driving South Asia Economic Integration” on 17 December 2012 at India Habitat Centre, New Delhi.

The prominent speakers and chief guest at the seminar included foreign secretary of India and High Commissioner of Pakistan and Bangladesh.
India’s Stance on Currency swap Agreement.

India would lead an initiative to develop a currency swap agreement among members of the South Asian Association of Regional Co-operation (SAARC) which is supposed to help the countries protect their currencies during special exigencies.

India talked on the issue of protecting investments made by member nations and mentioned that the Policies are made by each country based on its laws. But once are policies in place that are in line with international practices, non-economic considerations should not be allowed to affect the functioning of commercial entities in each others’ country.

On the SAARC agreement to develop a food security reserve, it was asserted that currently India has to hold reserves of 3 lakh metric tonnes of food including both wheat and rice out of the 4.86 lakh metric tonnes envisaged in the group as a whole.

The Bangladesh High Commissioner, Tariq Ahmad Karim, the other member present in the conference suggested that unlocking of the potential of the North-East would benefit both India and Bangladesh.

He called for removing barriers, such as restrictions on ports or land route from where Bangladesh can export goods to India. He suggested the creation of more border markets, easing banking transactions and providing long-term visas to Bangladeshis.

What is Currency Swap Agreement?

A currency swap is a foreign-exchange agreement between two parties to exchange aspects (namely the principal and/or interest payments) of a loan in one currency for equivalent aspects of an equal in net present value loan in another currency.

Currency swaps is mainly used to secure cheaper debt (by borrowing at the best available rate in spite of currency and then swapping for debt in desired currency using a back-to-back-loan and To hedge against (reduce exposure to) exchange rate fluctuation.