3:35 AMJapan, India seal $15 billion currency swap deal
NEW DELHI: Japan and India struck a $15 billion currency swap deal Wednesday that could bolster the sagging rupee as Japanese Prime Minister Yoshihiko Noda made a lightning 36-hour trip to New Delhi.
The currency swap was part of a host of agreements signed by India and Japan, which is seeking to forge closer partnerships in the Asian region as a counterweight to China’s growing might.
The swap, under which Japan could lend India dollars to defend the rupee, which has fallen 15 per cent this year, is an expansion of a $3 billion accord that expired earlier this year.
"Japan and India will expand their currency swap from a current $3 billion to $15 billion,” Noda told a news conference in the Indian capital late Wednesday.
The agreement could help India cope with the rapid withdrawal of funds by overseas investors amid global financial turmoil.
"It makes a lot of sense for our two countries to expand their swap agreement for the stability of global currency markets,” Japanese government spokesman Nori Shikata told reporters in New Delhi.
Japan, which has some $1.2 trillion in foreign exchange reserves, struck a similar currency swap accord with South Korea in October. India has some $300 billion in foreign exchange reserves.
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