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Swap Agreement With Japan

Japan can do the same in exchange for the yen. The agreement would be implemented by the Reserve Bank of India and the Bank of Japan. There is another aspect to the agreement – the. While the previous agreement aimed to respond to the current account crisis and stabilize money markets in Asia, the new swap agreement aims to support each country`s economic and financial activities by improving financial stability. The swap was launched in March 2002 as part of multilateral currency swap lines known as the Chiang Mai Initiative and created in response to the Asian financial crisis of the late 1990s. Even if your finances were on the brink every hour, you`d probably be sleeping quietly if you knew you had that vital artery. Your own creditworthiness with others would increase by a few steps after this deal, because everyone knows you have that ₹75 Lakh of the barrel. This currency swap arrangement will allow the Central Bank of India to draw up to $75 billion in yen or $1 in the form of loans from the Japanese government whenever it needs that money. The RBI can sell these dollars (or yen) either to importers to pay their bills or to borrowers to repay their foreign loans. The RBI can even cling to the money to support its own foreign exchange reserves and defend them in the rupee. If the Central Bank of Japan knocks on India`s doors for a $75 billion loan, the RBI is also required to provide it from its own reserves to Libor. During his recent visit to Japan, Prime Minister Narendra Modi not only discussed high-speed trains and yen loans with his Japanese counterpart, but also reached an agreement for a bilateral currency exchange agreement. While India has such agreements with many Asian nations, this is one of the largest of these agreements, worth $75 billion.

The government hopes the deal will serve as a buffer to support the rupee, which has depreciated by 14 percent this year against the dollar. TOKYO: Japan and Malaysia on Friday reached a reciprocal currency swap agreement that allows each side to make up to US$3 billion available to the other side to avoid a financial crisis, japan`s treasury said. A swap deal with Japan brings considerable comfort to India, as Japan is the second largest holder of dollar reserves in the world after China and sits on fat crates of more than $1.25 trillion. . . .