As per the announcement by Union Minister for Commerce and Industry Shri Anand Sharma, a Task Force on Currency Swap Arrangements for Trade was formed yesterday. In this regard Commerce Secretary Shri S. R. Rao has clarified as follows:
A Task Group has been formed within the Department of Commerce, also including EXIM Bank, ECGC and SBI to explore the possibility of using local currency for trade with major trading partners and advice on pros and cons of the same. The purpose of the task force is limited to examine swap of national currency for trade which is distinct from currency swap agreements of Central Banks.
The Task Force will have the following Terms of Reference:
1. To examine various types of Currency Swap Agreements/Arrangements and their implication for India’s trade and financial system;
2. To study the pros and cons of Currency Swap Agreement/Arrangement for India’s trade;
3. To explore the possibility of Currency Swap Arrangement/Agreement between India and identified countries and make recommendations accordingly.
The Task Force will have the following constitution:
1. Additional Secretary, Trade Policy Division, Department of Commerce - Chair
2. Representative of Department of Economic Affairs not below the rank of Joint Secretary
3. Representative of Department of Financial Services not below the rank of Joint Secretary
4. Economic Adviser, Department of Commerce
5. Representative of Reserve Bank of India
6. Representative of State Bank of India
7. Representative of EXIM Bank
8. Industry representative from FICCI and CII
9. Representative from EEPC and FIEO
10. Any other member co-opted by Chairperson of Task Force
11. Joint Secretary, Trade Policy Division – Member Secretary
The Task Force may submit its recommendations to the Department of Commerce in four weeks.
The issue had come up for discussion during the Board of Trade meeting chaired by Commerce and Industry Minister, Anand Sharma. Currency swap agreements involve exchange of one currency for another currency. A dollar swap arrangement would help India support the rupee. Swap agreements in US dollar is expected to provide confidence to the market and prevent excess volatility in financial and foreign exchange markets.
Currency swap has emerged as an important derivative tool after the global financial crisis of 2008 to hedge the exchange rate risks. India has signed currency swap agreements with Japan ($15 billion) and Bhutan ($100 million). China has shown active interest in entering into such an agreement with India, but it is yet to be signed.
The inter-departmental group of the Commerce Ministry will also have representation from Export Credit Guarantee Corporation of India. It would explore the possibility of using local currency for trade with major trading partners and advice on pros and cons of the same, it added.
Additional inputs curtsy The Hindu Dated August 28, 2013
A Task Group has been formed within the Department of Commerce, also including EXIM Bank, ECGC and SBI to explore the possibility of using local currency for trade with major trading partners and advice on pros and cons of the same. The purpose of the task force is limited to examine swap of national currency for trade which is distinct from currency swap agreements of Central Banks.
The Task Force will have the following Terms of Reference:
1. To examine various types of Currency Swap Agreements/Arrangements and their implication for India’s trade and financial system;
2. To study the pros and cons of Currency Swap Agreement/Arrangement for India’s trade;
3. To explore the possibility of Currency Swap Arrangement/Agreement between India and identified countries and make recommendations accordingly.
The Task Force will have the following constitution:
1. Additional Secretary, Trade Policy Division, Department of Commerce - Chair
2. Representative of Department of Economic Affairs not below the rank of Joint Secretary
3. Representative of Department of Financial Services not below the rank of Joint Secretary
4. Economic Adviser, Department of Commerce
5. Representative of Reserve Bank of India
6. Representative of State Bank of India
7. Representative of EXIM Bank
8. Industry representative from FICCI and CII
9. Representative from EEPC and FIEO
10. Any other member co-opted by Chairperson of Task Force
11. Joint Secretary, Trade Policy Division – Member Secretary
The Task Force may submit its recommendations to the Department of Commerce in four weeks.
The issue had come up for discussion during the Board of Trade meeting chaired by Commerce and Industry Minister, Anand Sharma. Currency swap agreements involve exchange of one currency for another currency. A dollar swap arrangement would help India support the rupee. Swap agreements in US dollar is expected to provide confidence to the market and prevent excess volatility in financial and foreign exchange markets.
Currency swap has emerged as an important derivative tool after the global financial crisis of 2008 to hedge the exchange rate risks. India has signed currency swap agreements with Japan ($15 billion) and Bhutan ($100 million). China has shown active interest in entering into such an agreement with India, but it is yet to be signed.
The inter-departmental group of the Commerce Ministry will also have representation from Export Credit Guarantee Corporation of India. It would explore the possibility of using local currency for trade with major trading partners and advice on pros and cons of the same, it added.
Additional inputs curtsy The Hindu Dated August 28, 2013
