News: Maldives President is expected to seek India’s support in the form of currency swap arrangement, debt support to resolve the economic crisis faced by the domestic economy.
1. Currency swap arrangement is a financial arrangement between two countries where one of them agrees to provide a loan to another in a foreign currency.
2. Benefits of currency swap arrangement include lower interest rates, increased economic cooperation, financial safety nets, financial stability.
3. Debt to GDP Ratio is an economic indicator that measures the ratio of a country’s public debt to its gross domestic product.
4. Maldives economy is facing a high debt to GDP ratio, which implies that country is less likely to pay back its debt and has a higher risk of default.
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