Bilateral Swap arrangement approved by Govt. |
Government of India has approved the proposal for entering into an Agreement for Bilateral Swap Arrangement between India and Japan. It authorizes the Reserve Bank of India to sign the Agreement with the Bank of Japan for a maximum amount of 75 billion US Dollars. The swap arrangement is an agreement between India and Japan to essentially exchange and re-exchange a maximum amount of 75 Billion US Dollars for domestic currency, for the purpose of maintaining an appropriate level of balance of payments for meeting short-term deficiency in foreign exchange. The BSA is a very good example of mutual cooperation between India and Japan for strategic objective of assisting each other in times of difficulty and for restoring international confidence. This facility will enable the agreed amount of Capital being available to India on tap for use. Also, with this arrangement in place, prospects of Indian companies would improve in tapping foreign capital as there would be greater confidence in stability of country`s exchange rate.
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