With a view to stabilising rupee, a task force will be set up to look at the possibility of having currency swap agreements with key trading partners, Commerce and Industry Minister Anand Sharma said today.
The task force would have about 7-8 members, including representatives from the finance ministry, bank, exporters community and the commerce ministry.
"We are looking at the possibility (of currency swap arrangements with a few countries). The task force/committee will be notified which will have bankers. The Commerce Secretary will take it forward and the report will be submitted to the government within four weeks...
"This is something which is not new, but yes we are thinking on these lines to ease the pressure and also (control) the outgo of the hard currency wherever it is possible," Sharma said.
An official said the task force will most likely be notified by the end of this week.
Meanwhile, the rupee breached 66-level vis-a-vis a dollar intra-day at the Inter-bank Foreign Exchange Market today. Hitting record lows consistently, the rupee has depreciated by nearly 15 per cent Since April.
He said India has already agreed for such a arrangement (currency swap) with Japan for the the Delhi-Mumbai Industrial Corridor.
Currency swap agreements involve exchange of one currency for another currency. A dollar swap arrangement would help India support the rupee. Swap agreements in US dollar is expected to provide confidence to the market and prevent excess volatility in financial and foreign exchange markets.
Currency swaps have emerged as an important derivative tool after the global financial crisis of 2008 to hedge the exchange rate risks.
India has signed currency swap agreements with Japan (USD 15 billion) and Bhutan (USD 100 million). China has shown active interest in entering into such an agreement with India, but it is yet to be signed.
