Date : 04 Dec 2012

The Bank of Japan (BOJ), acting as the agent for the Minister of Finance of Japan, and the Reserve Bank of India (RBI) concluded a Bilateral Swap Arrangement (BSA) between Japan and India. The BSA was signed by Governor Masaaki Shirakawa of the BOJ and Governor D. Subbarao of the RBI and become effective as of December 4, 2012.

The BSA enables both countries to swap their local currencies (i.e., either Japanese yen or Indian rupee) against US dollar for an amount up to USD 15 billion. In the past, both countries had a similar arrangement for an amount up to USD 3 billion for a period of 3 years from June 2008 to June 2011.

The arrangement aims at addressing short-term liquidity difficulties and supplementing the existing international financial arrangements, as one of the efforts in strengthening mutual cooperation between Japan and India.

The BSA will be activated when an IMF-support program already exists or is expected to be established in the near future. Nevertheless, up to 20 percent of the maximum amount of drawing could be disbursed without an IMF-support program.

This enhancement of the BSA will further strengthen economic and financial cooperation between the two countries and accordingly contribute to ensuring financial market stability.

The BSA shall be effective for a three (3)-year period.

Ajit Prasad

Assistant General Manager

Press Release : 2012-2013/924

Bilateral swap arrangement enables yen-rupee currency swaps against the US dollar to address short-term liquidity and supplement cooperation. Bilateral Swap Arrangement between the Bank of Japan and the Reserve Bank of India allows swapping of local currencies (yen or rupee) against the US dollar to address short term liquidity and supplement international financial arrangements; activation is tied to an existing or expected IMF support program while permitting a limited portion of maximum drawings without IMF support, and the arrangement is effective for a three year period.