India and Japan signed a dollar swap agreement of $15 billion.

india and chinaNew Delhi: India and Japan on Wednesday signed a dollar swap agreement of $15 billion (Rs 79,330 crore), whose instant effect would to reinforce this country in handling the sinking rupee.

Both also agreed to enhanced the talks on an Agreement for Cooperation in Peaceful Use of Nuclear Energy and seek out early conclusion. To enhance bilateral trade to $25 bn (Rs 1.3 lakh crore)  from present $15 bn in 2014.

The currency swap would happen between the Reserve Bank of India (RBI) and its equivalent in Tokyo, the Bank of Japan. The two central banks would offer each other dollars to steady their currencies, in case of need.

The rupee has fallen 16 per cent this financial year. Satirically, it rose on Wednesday by five paise, to 52.97/98 from 53.02/03 yesterday.

According to the mutual statement issued after the meeting of PM Manmohan Singh with his visiting complement, Yoshihiko Noda said that “This enhancement (of the currency swap) will further strengthen financial cooperation, contribute to ensuring financial market stability and further develop growing economic and trade ties between the two countries.”

Both countries former had a currency arrangement for $3 bn since 2008 that expired this June.

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