According to a Reserve Bank of India (RBI) statement, India and Japan have extended their bilateral swap agreements worth US$ 75 billion. The RBI and the Bank of Japan signed an amendment and restatement agreement of the bilateral swap agreement (BSA) on behalf of the Minister of Finance of Japan.
Japan and India think that the BSA will improve financial cooperation between the two countries and contribute to regional and global financial stability by strengthening and complementing financial safety nets.
The BSA was negotiated between India and Japan during the Indian Prime Minister’s visit to Japan in 2018. Following that, in October 2020, a US$ 75 billion swap agreement was negotiated in order to further improve foreign exchange stability.
BSA is essentially a two-way agreement in which both governments can exchange their local currencies for dollars. This means that India can obtain dollars in exchange for rupees from Japan. Japan, on the other hand, can seek dollars from India in return for yen.
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