Consider the following statements: Statement I: The SAARC Currency Swap Framework provides short-term foreign exchange liquidity support to member countries to address balance of payments pressures. Statement II: The framework operates through bilateral agreements between the Reserve Bank of India (RBI) and SAARC member central banks and includes both INR and USD/Euro swap windows. Statement III: The SAARC Currency Swap Framework eliminates all exchange rate risks and ensures long-term financial stability for member countries. Which one of the following is correct in respect of the above statements?

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Economics · SAARC and Foreign Exchange Mechanisms

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Correct answer

Only one of the Statements II and III is correct, and that explains Statement I.

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Answer 1

Both Statement II and Statement III are correct, and both of them explain Statement I.

Answer 2

Both Statement II and Statement III are correct, but only one of them explains Statement I.

Answer 3

Only one of the Statements II and III is correct, and that explains Statement I.

Answer 4

Neither Statement II nor Statement III is correct.

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