Japan and India sign currency swap deal

Japan and India have signed a currency swap agreement as they work to strengthen their financial cooperation.

The $15 billion (£9.7 billion) deal will see the two nations swap their currencies for dollars and will permit them to ease liquidity problems by dipping into each others’ foreign exchange reserves. A $3 billion currency accord signed by the countries in 2008 expired in June.

It is expected that the new agreement will offer a source of strength to the Indian rupee, which has been the worst performing Asian currency of the year.

A joint statement issued by Japanese prime minister Yoshihiko Noda and Indian prime minister Manmohan Singh, reports: “Amid global economic uncertainties, ensuring the stability of the financial markets is all the more important for the stable economic development of the two countries.”

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