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Currency Swap
India and Japan have renewed the USD 75 billion bilateral currencies swap agreement, the Reserve Bank said in a statement on Friday. The Bilateral Swap Arrangement (BSA) is a two-way arrangement where both authorities can swap their local currencies in exchange for the US dollar. The Bank of Japan, acting as agent for the Minister of Finance of Japan, and the Reserve Bank of India signed the Second Amendment and Restatement Agreement of the BSA, the central bank said. The renewed BSA is effective Friday (February 28, 2025). The size of the BSA remains unchanged -- up to 75 billion US dollars, the RBI said. It further said that Japan and India believe that the BSA, which aims to strengthen and complement other financial safety nets, will further deepen financial cooperation between the two countries and contribute to regional and global financial stability.
Consultants and service providers have urged the government to enable direct foreign currency transactions within the country through RBI, bypassing the current practice of routing transactions via the US banking system. Intercontinental Consultants and Technocrats (ICT) Chairman K K Kapila said currently, even domestic transactions in the US dollar between entities within India necessitate routing through the US banking system, incurring transaction fees. "This practice results in substantial funds leaving our economy in the form of fees paid to American banks," Kapila added, who also heads Indian Road Federation (IRF). He emphasised that it is illogical that internal foreign currency transactions within India require routing through the US, resulting in unnecessary costs to our businesses and economy. According to Kapila, consultants and service providers emphasised the need for a streamlined approach where transactions involving foreign currencies like US dollars are facilitated
The Maldives is currently discussing with India if the island nation can make payments for its imports from the country in Maldivian Rufiyaa, a senior minister has said. A similar arrangement is also being worked out for imports of goods from China, Minister for Economic Development Mohamed Saeed said and noted that annually, Maldives imports goods worth USD 780 million and USD 720 million from India and China respectively. According to the news portal Edition.mv, Saeed was speaking at an event held on the island of Maavah during President Mohamed Muizzu's visit to Laamu Atoll ahead of parliamentary elections on April 21. He stated that if the ruling party were able to secure a majority in Parliament, they would be able to bring the dollar rate back down to official market values within approximately two years. Saeed said his party was now getting all signals that there was a possibility to make non-dollar payments for all of these massive import arrangements. International trade
India and the UAE on Saturday agreed to start trade settlement in their currencies and link the Indian Unified Payments Interface with the Gulf country's Instant Payment Platform (IPP) as Prime Minister Narendra Modi held comprehensive talks with UAE President Sheikh Mohamed bin Zayed Al Nahyan here. In his remarks after meeting the UAE President, Modi said India-UAE trade witnessed a 20 per cent increase since the signing of the Comprehensive Economic Partnership Agreement last year. Modi said the agreement signed on Saturday for trade settlement in the currencies of the two countries shows the strong economic cooperation and mutual trust between the two nations. "It is always gladdening to meet HH Sheikh Mohamed bin Zayed Al Nahyan. His energy and vision for development are admirable. We discussed the full range of India-UAE ties including ways to boost cultural and economic ties," Modi said on Twitter after the meeting. The agreement with the UAE on trade settlement in the ...
External Affairs Minister S Jaishankar on Saturday said that India and Tanzania have started trade settlements in local currencies and this new initiative will help in promoting commerce between the two countries. Addressing industry leaders at a function, the minister said India-Tanzania bilateral trade has seen very strong growth, and stood at USD 6.4 billion in 2022-23. "Now, bear in mind, this is not only a very substantial bilateral trade, but it's also actually a bilateral trade, which is getting increasingly balanced. Many new products are being added to the trade basket...India remains the biggest destination for Tanzanian exports," he said. There's also an issue which has been brought up from time to time, which is the possibility of trade settlements in our own currencies, Jaishankar said. "And I want to share with you that the India central bank has cleared such a possibility. So the three Indian banks, which are here, have that ability to do trade settlements in each ..
The BRICS nations on Friday underlined the need for using local currencies in international trade and financial transactions besides committing themselves to supporting rule-based open and transparent global trade. A joint statement issued at the end of the meeting of the BRICS Ministers of Foreign Affairs and International Relations, also pressed for a robust Global Financial Safety Net with a quota-based and adequately resourced International Monetary Fund (IMF) at its centre. It further said the process of IMF governance reform under the 16th General Review of Quotas, including a new quota formula as a guide, should be completed by December 15, 2023. The joint statement titled 'The Cape of Good Hope', said ministers expressed their support for a free, open, transparent, inclusive, equitable, non-discriminatory and rules-based multilateral trading system with the World Trade Organization (WTO) at its core, with special and differential treatment (S&DT) for developing countries, .