Q. Consider the following statements about Asian Clearing Union (ACU):
1. It was established in 1974 at the initiative of the United Nations ESCAP.
2. It is headquartered in Colombo, Sri Lanka.
Which of the statements given above is/are correct
About Asian Clearing Union (ACU):
Asian Clearing Union (ACU) was established in 1974 at the initiative of the United Nations Economic and Social Commission for Asia and Pacific (ESCAP).
Objective: To facilitate payments among member countries for eligible transactions on a multilateral basis, thereby economizing on the use of foreign exchange reserves and transfer costs, as well as promoting trade among the participating countries.
Members: The Central Banks and the Monetary Authorities of Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka are currently members of the ACU.
Headquarters: Tehran, Iran.
About Currency Swap
A currency swap between the two countries is an agreement or contract to exchange currencies with predetermined terms and conditions.
As per the arrangements, both countries pay for import and export trade at the pre-determined rates of exchange, without bringing in third-country currency like the US Dollar. In such arrangements no third country currency is involved, thereby eliminating the need to worry about exchange variations.
Source: international organizations, groupings, and initiatives
