Government of India and Government of Japan on 6 September 2013 decided to expand their bilateral currency swap arrangement from 15 billion US dollars to 50 billion US dollar till December 2015. It is expected that this will contribute to the stability of financial markets. The Government of India and the Reserve Bank of India would discuss and finalise the terms of this enhancement with their Japanese counterparts. Following the provisions of the agreement Japan will also get the facility of exchanging Yen for dollars.
Earlier, on 4 December 2012 a bilateral swap agreement was signed between the Bank of Japan and the Reserve Bank of India for 15 billion US dollar. This arrangement aimed at addressing possible short-term liquidity mismatches and supplementing existing international financial arrangements, as part of the effort to strengthening the mutual cooperation between Japan and India.
The currency swap deal would help the Governments of both the nations to work during emergency situation to tackle the Balance of Payments (BoP) problems. On Indian perspective, the arrangement would help in reversing the fears of Indian side in relation to the worsening situations in context of its Current Accounts Deficit (CAD).
Who: India and Japan
Where: St Petersburg
When: 6 September 2013