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The word swap means exchange. A currency swap between two countries is an agreement or contract to exchange currencies (of the two countries or any hard currency) with predetermined terms and conditions. Often the popular form of currency swap is between two central banks. Here, the main purpose of currency swap by a central bank like the RBI is to get the foreign currency form the issuing foreign central bank at the predetermined conditions (like exchange rate and the volume of currency) for the swap. Besides supporting the domestic currency and foreign exchange market, another main purpose of currency swap is to keep the value of the foreign exchange reserves kept with the central bank. What is the purpose of currency swap? As mentioned, the main purpose of currency swaps is to avoid turbulence and other risks in the foreign exchange market and exchange rate. Central banks and governments engage in currency swaps with foreign counterparts to ensure adequate foreign currency dur...

News has only gradually seeped out that the Minsk II agreement, to find a peaceful way to end the war between Ukraine and its breakaway far eastern Donbass region, collapsed on March 26th. It was an agreement which Francois Hollande of France and Angela Merkel of Germany had established with Vladimir Putin of Russia, on 11 February 2015, in Minsk, Belarus. U.S. President Barack Obama, the founder of today’s Ukraine, had opposed that Agreement, because he was encouraging the then-President of Ukraine, Petro Poroshenko, militarily to retake both Donbass and Crimea by force — or at least to attempt to do so. The “Minsk Protocol” had set up a “contact group” of representatives from Ukraine, Russia, and the OSCE (a peace-maintenance organization consisting of virtually all countries in the northern hemisphere). The agreement’s purpose was to establish direct talks between representatives of Ukraine and representatives of Donbass. Whereas Donbass was reluctantly willing to have suc...

In February, the city administration announced that Simferopol, the capital of the Russian-annexed Crimea, had enough water supply to last only 100 days. The water shortage in one of the biggest cities on the peninsula reflects the situation in the entire region. In 2014, in response to the annexation of Crimea, Kyiv decided to cut off the water supply to the peninsula. Chronic water shortages have been an acute problem ever since. Crimea has always depended on the water supply from the mainland. The 400-kilometer-long North Crimean Canal (NCC) carried water from Ukraine’s biggest river, Dnipro, to the peninsula. Before the occupation, the canal provided 85% of drinkable water to Crimea. Today, the water crisis affects all facets of life on the peninsula. It has become a source of tension not only between Moscow and Kyiv but also within the Ukrainian government itself. The crisis has gradually transformed the peninsula, creating challenges to the eventual reintegration of Cri...

COLD WAR ERA India since its independence in 1947 has followed a policy of peace and non-alignment. India has always raised its voice in favor of truth and Justice. It was after India got its Independence in 1947 that the Nation has able to form its own foreign policy. India relationship with the Soviet Union started off very well due to Pandit Nehru’s initiative. The relationship began with a visit by Indian Prime Minister Jawaharlal Nehru to the Soviet Union in June 1955 and Khrushchev’s return trip to India in the fall of 1955. While in India, Khrushchev announced that the Soviet Union supported Indian sovereignty over the disputed territory of the Kashmir region and over Portuguese coastal enclaves such as Goa.  India’s relations with the Soviet Union in those first five year after independence were ambivalent, guided by Nehru’s decision, to remain non-aligned and take active part in the Commonwealth of Nations. However in February 1954, when the US administration annou...

Major economies should pursue currency agreements to stabilize the US dollar, especially during the COVID-19 crisis, preventing a rapid rise against other currencies that is sure to trigger calls for protectionist measures. There is historical precedent. In 1985, the US dollar soared. The United States, West Germany, Japan, France and the United Kingdom – the Group of 5 world powers – met at the Plaza Hotel in New York on a Sunday in September, when markets were closed. Four nations agreed to appreciate their currencies to depreciate the US dollar. Multilateralism and discrete action were necessary to realign exchange rate stability and counter the strong dollar in the early 1980s, with particular significance to West Germany and Japan, two former adversaries that were gobbling up increased US industrial output. Former US Treasury Secretary James Baker III convened the meeting, expressing concern about rising protectionist sentiment among US industrial interests over an...

A church tax is a tax imposed on members of some religious congregations to provide financial support of churches, such as the salaries of its clergy and to pay the operating cost of the church. A church tax is imposed in Austria, Denmark, Finland, Germany, Iceland, Italy, Sweden, some parts of Switzerland and several other countries. The constitution of a number of countries prohibit the state from imposing a church tax. These include the United States and Australia. Austria Every recognized religious group in Austria can collect church tax at a rate of 1.1%, though currently only the Catholic Church makes use of that opportunity. Church tax is compulsory for Catholics in Austria. This tax was introduced by Adolf Hitler in 1939. After WW2, the tax was retained in order to keep the Church independent of political powers. Croatia The Roman Catholic Church in Croatia receives significant state financial support and other benefits established in concordats...

The year 2020 opened with yet another high-profile dispute between Russia and one of its neighbors, Belarus, over costs related to the supply of oil and gas to that country. Until now, Belarusian President Aleksandr Lukashenko has been able to negotiate favorable terms for his country, a vital necessity given the near complete dependence of the Belarusian economy on the refinement and resale of Russian energy products. However, the decision taken by Russian suppliers to halt the flow of oil through the Druzhba Pipeline on January 1st did not arise out of purely economic considerations. Indeed, the decision was taken against the backdrop of a long series of negotiations that took place throughout 2019 aimed at deepening political and economic integration between the Belarusian and Russian states. At the end of 2018, then Russian Prime Minister Dmitri Medvedev set the tone for Russian-Belarusian dialogue for the following year when he made clear that future negotiations on oil and gas...