India and the Maldives on Monday signed a currency swap agreement for $400 million as part of the $1.4 billion economic package announced last year.

“India & Maldives signed Currency Swap Agreement for $400 million today as part of the $1.4 billion economic package announced in December 2018. Signing took place in Malè by Gov MMA and Exec Dir RBI,’’ the Indian Embassy in Male tweeted.

The swap will allow the countries to exchange currencies with pre-determined terms and conditions. The aim of the accord is to avoid risks in foreign exchange market and exchange rate.

India and the Maldives signed four agreements during Solih’s visit last year.