PTI reported that India and Japan recently signed a currency swap agreement for up to USD 15 billion to address short term liquidity problems.
The bilateral swap arrangement between the Reserve Bank of India and the Bank of Japan enables both the countries to swap their local currencies either Japanese yen or Indian rupee against the US dollar for an amount up to USD 15 billion.
The RBI in a statement said that "The arrangement aims at addressing short term liquidity difficulties and supplementing the existing international financial arrangements, as one of the efforts in strengthening mutual cooperation between Japan and India."
The arrangement to be effective from December 4th 2012 would be for a 3 year period.
Earlier, both countries had a similar arrangement for an amount of up to USD 3 billion for a period of 3 years between June 2008 and June 2011.
The RBI said that "This enhancement of the BSA will further strengthen economic and financial cooperation between the two countries and accordingly contribute to ensuring financial market stability."
