SAARC to open liquidity swap window next year
KABUL (PAN): South Asian Association for Economic Cooperation (SAARC) finance ministers have agreed on opening a liquidity-swap window to support member countries in times of global recession.
The agreement on liquidity swap -- a kind of currency exchange used by a country's central bank to provide liquidity to another central bank -- came at a meeting of SAARC ministers in Dhaka, the capital of Bangladesh.
Bangladesh Finance Minister AMA Muhith told journalists late on Monday: “It will make transactions among the member countries much easier. It will enable member countries to do business and settle payments after a certain period.
Proposed by India, the swap agreement would go into effect next year, the minister indicated, saying progress had been made toward forming a South Asian Economic Union, coordination on fiscal policies and joint monitoring of exchange rates.
In order to to avoid possible risks, Muhith stressed the need for initiating effective and coordinated policy in monetary and fiscal arena. He also called for developing a regional surveillance mechanism to forecast the fallout of external shocks.
Set up in 2005, the Saarc finance ministers' forum seeks to bring into being a South Asian Union. Bangladesh Finance Secretary Mohammad Tareque said: “The SAARC Development Fund is already in place. In the long run, this fund will be converted into a regional development bank.”