India and the Maldives have taken a significant step toward mending fractured relations with the announcement of a $400 million (Rs. 3,000 crore) currency swap deal during Maldivian President Mohamed Muizzu’s first official state visit to New Delhi. 

Key Points

Maldivian President Mohamed Muizzu is on a four-day state visit to India aimed at mending strained ties between the two nations 

The move marks a positive shift in diplomatic ties that had been strained by two high-profile disagreements over the past year.

What is  currency swap agreement?

The currency swap agreement is seen as crucial for the Maldives, which is grappling with foreign exchange challenges. Under this arrangement, the two nations will exchange the principal and interest of loans in their respective currencies, thus easing the financial burden on Male. India also extended a $100 million rollover of Treasury bills, reinforcing its support to the island nation.