Japan extended support to India’s fight against currency volatility by agreeing to more than treble the scope of the bilateral swap arrangement to $50 billion.
The facility between the Reserve Bank of India and the Bank of Japan enables both countries to swap Japanese yen or the Indian rupee for US dollars in an unforeseen situation. It is essentially an arrangement to tide over short-term foreign exchange crunch. The deal was first signed in 2008 and was limited to $3 billion, but the size was increased to $15 billion when the arrangement was renewed in 2011.
“The two governments expect that this will contribute to the stability of global financial markets, including emerging economies,” India and Japan said in a joint statement after a meeting between Prime Minister Manmohan Singh and Japanese deputy PM Taro Aso on the sidelines of the G-20 summit.
The facility between the Reserve Bank of India and the Bank of Japan enables both countries to swap Japanese yen or the Indian rupee for US dollars in an unforeseen situation. It is essentially an arrangement to tide over short-term foreign exchange crunch. The deal was first signed in 2008 and was limited to $3 billion, but the size was increased to $15 billion when the arrangement was renewed in 2011.
“The two governments expect that this will contribute to the stability of global financial markets, including emerging economies,” India and Japan said in a joint statement after a meeting between Prime Minister Manmohan Singh and Japanese deputy PM Taro Aso on the sidelines of the G-20 summit.
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