India, Japan agree to USD 15 bn currency swap

New Delhi: India and Japan on Wednesday agreed to a dollar swap agreement of USD 15 billion, a move which will help stabilise the rupee and boost trade between the two countries. An earlier USD 3 billion arrangement, that came into force in 2008, had expired in June.

Prime Minister Manmohan Singh and Japanese Prime Minister Yoshihiko Noda "decided to enhance the earlier bilateral currency swap arrangement from USD 3 billion to USD 15 billion," a joint statement said.

The dollar swap arrangement would help India in supporting the rupee, which has depreciated by about 15-16 per cent against the US currency since April due to various global and domestic factors.

The arrangement would provide a supply of the US dollar in an unforeseen economic situation. New Delhi will have access to funds from Bank of Japan, which it can return at a later date.

The two leaders expressed hope that the enhancement will further strengthen financial cooperation, contribute to ensuring financial market stability and further develop growing economic and trade ties between the countries, the statement said.

The two Prime Ministers also decided to accelerate efforts by the relevant authorities for an early realisation of the some projects including seawater desalination at Dahej, a microgrid system using large-scale photo-voltaic power generation at Neemrana and gas-fired independent power producer in Maharashtra, it said.

The leaders also decided to strengthen efforts to improve infrastructure such as ports, industrial parks and their surrounding facilities in Ennore, Chennai and the adjoining areas, it added.