'Indo-Japan currency swap at $50 bn to firm up financial ties'

The two govts expect that this will contribute to the stability of global financial markets including emerging economies

Raising the currency swap arrangement between India and Japan to USD 50 billion from USD 15 billion would help in strenghtening financial tie up between the two countries, a senior Japanese official said today.

"The currency swap arrangement between India and Japan in St Petersburg (Russia) recently will result in further strengthening of India-Japan financial relations. It will also bring stability in the Indian economy," Osamu Tanaka, Executive Vice President, Policy Research Institute, Ministry of Finance, Japan said here.

He was addressing a conference on Governance & Development: Views from G20 Countries organised by economic thinktank ICRIER.

Earlier this month in Russia, the two countries had decided to more than treble their currency swap arrangement from USD 15 billion to 50 billion, a move that is seen as sending an important signal for the rupee, which plunged to all time low of 68.85 per USD on August 28.

Tanaka said that the new arrangement will have a stability effect in the economies of the Asian region, not only India.

The decision to expand bilateral currency swap was taken during a meeting between Prime Minister Manmohan and Japanese Deputy Prime Minister Taro Aso in Russia on the sidelines of the summit of G20 industralised and emerging economies.

The two governments expect that this will contribute to the stability of global financial markets including emerging economies.