SSC CGL 2025 Tier-I · 14 September 2025, Shift 1 · General Awareness · Question 7 of 100

We transcribed this text from the pictures on a candidate's response sheet for this shift; the answer is the key SSC colour-marked on that sheet. Solution last reviewed 11 September 2026.

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Which mechanism did India operationalize in 2024 to strengthen regional financial resilience within SAARC?

(a)SAARC Development Fund capital increase
(b)SAARC Currency Swap Framework (2024–27)
(c)SAARC Trade Insurance Scheme
(d)SAARC Sovereign Credit Pool

Answer

Why

Correct — B. On 27 June 2024 the RBI, with the Government of India's concurrence, announced a revised SAARC Currency Swap Framework for 2024-27.

The RBI signs bilateral swap agreements with SAARC central banks that want the facility. The revision added an INR Swap Window with a ₹250 billion corpus, beside a US dollar/euro window of US$2 billion.

Why the others are wrong

(a)
SAARC Development Fund capital increase — The SAARC Development Fund is a separate body, a Thimphu-based regional financial institution for projects. India's 2024 step was the RBI's swap framework.
(c)
SAARC Trade Insurance Scheme — What the RBI announced was a currency swap backstop for foreign-exchange liquidity and balance-of-payments stress, not trade insurance.
(d)
SAARC Sovereign Credit Pool — The framework is not a common pool. The RBI signs bilateral swap agreements with each SAARC central bank that wants the facility.

Concept

In a currency swap, two central banks exchange currencies now and reverse the exchange later, so a country short of foreign exchange can borrow it for a set period.

The SAARC Currency Swap Facility began on 15 November 2012. RBI calls it a backstop line of funding for SAARC countries facing short-term foreign-exchange shortages or balance-of-payments crises.

The 2024-27 revision kept the dollar/euro window and added concessions for swaps in Indian rupees.

Key facts

RBI announced the SAARC Currency Swap Framework for 2024-27 on 27 June 2024, with the concurrence of the Government of India.
The SAARC Currency Swap Facility first came into operation on 15 November 2012.
The 2024-27 framework has an INR Swap Window with a ₹250 billion corpus and a US dollar/euro window of US$2 billion.
The facility is open to SAARC members that sign bilateral swap agreements with the RBI.

Study next

SAARC's members and its secretariat in KathmanduComponents of India's foreign-exchange reservesSettling trade in rupees through Special Rupee Vostro Accounts

Common traps

Picking the SAARC Development Fund because it sounds financial, when the 2024 step was the swap framework.
Imagining a pooled regional fund, when the facility runs through bilateral agreements.

The balance-of-payments crisis such a backstop guards against is the subject of 17 Sep 2025, 16:00, GA Q.22, on India's approach to the IMF and World Bank in 1991.

Related PYQs

No directly related past PYQ was found.

Topic: Current events — all 156 SSC CGL questions on it, every solved shift.