THE RESERVE BANK OF INDIA IS REPORTEDLY in discussions with the United States Federal Reserve to put in place a rupee-for-dollar swap line. If the Fed accedes, this would be a first for India but not for the Fed, which has had temporary and standing swap arrangements with chosen foreign central banks for many decades. With trade and financial transactions overwhelmingly denominated in dollars, governments, firms and households across the world are constantly in need of dollars to settle transactions. Periodically, some governments and firms, especially those not earning adequate dollars from their own exports, face dollar funding shortages. The Fed’s swap arrangements are aimed at providing central banks in partner countries access to dollars to meet demands in their jurisdictions.
Under a swap arrangement between the Fed and a foreign central bank, the latter can access dollar funding in exchange for the domestic currency of the applicant. The swap involves two transactions: the first one is the sale to the Fed of a specified volume of the applicant’s domestic currency for dollars at the prevailing market (spot) exchange rate, and the second one is a buyback on a specified date in the future of the domestic currency with dollars paid by the foreign central bank at the same exchange rate. When the second transaction is completed, the foreign central bank also pays interest at a market-related rate, which depends on the duration for which it has drawn on the swap line.
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How Not To Handle An Epidemic
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Tragedy on foot
As the COVID-19-induced lockdown cuts the ground beneath their feet in Tamil Nadu, thousands of migrant workers are trudging along the highway to the relative safety of their upcountry homes.
Sarpanchs as game changers
Odisha manages to keep COVID-19 well under control because of the strong participation of panchayati raj institutions and the community at the grass-roots level under the leadership of Chief Minister Naveen Patnaik.
Scapegoating China
As the COVID-19 death rate spikes and the economy tanks in the United States, Donald Trump and his advisers target China and the World Health Organisation with an eye to winning the forthcoming presidential election.
New worries
Kerala’s measured approach to the pandemic and lockdown has yielded results. But it still has to grapple with their huge economic impact on its economy, which it feels the Centre’s special financial relief package does little to alleviate.
No love lost for labour
Taking advantage of the lockdown and the inability of workers to organise protests, many State governments introduce sweeping changes to labour laws to the detriment of workers on the pretext of reviving production and boosting the economy.
Capital's Malthusian moment
In a world that needs substantial reorienting of production and distribution, Indian capital is resorting to a militant form of moribund neoliberalism to overcome its current crisis. In this pursuit of profit, it is ready and willing to throw into mortal peril millions whom it adjudicates as not worth their means—an admixture of social Darwinism born of capital’s avarice and brutalism spawned by Hindutva. .
Understanding migration
When governments and their plans are found to be blatantly wanting in addressing reverse migration, exercises such as the Ekta Parishad’s survey of migrant workers throughout India can be useful to work out creative long-lasting solutions.
Waiting for Jabalpur moment
The Supreme Court’s role in ensuring executive accountability during the ongoing lockdown leaves much to be desired. Standing in shining contrast is the record of some High Courts.
An empty package
The Modi regime, which has been unable to control the COVID-19 infection, restore economic activity and provide relief to millions exposed to starvation, trains its sights on Indian democracy, making use of the panic generated by fear and a lockdown that forecloses paths of resistance.
