India-Japan sign currency swap accord to enhance bilateral trade
Central banks of India and Japan (The Reserve Bank of India (RBI) and the Bank of Japan (BoJ) respectively) signed a 3-year Bilateral Swap Arrangement (BSA).
How agreement will help?
- Help in addressing short-term liquidity problems
- Supplementing the existing international financial arrangements
- Strengthening bilateral trade b/w Japan and India
- Aid in ensuring financial market stability
This agreement will enable both the countries to swap their local currencies (i.e., either Japanese yen or Indian rupee) against US dollar for an amount up to $15 billion. Previously, the agreement b/w the two nations was limited to $3 billion for a period of three years from June 2008 to June 2011.