India, Japan likely to ink currency swap accord

December 26th, 2011 - 8:53 pm ICT by IANS  

Manmohan Singh New Delhi, Dec 26 (IANS) India and Japan Wednesday are likely to ink a multi-billion dollar bilateral currency swap agreement that could help New Delhi stem the rupee’s fall.

The accord is expected to be signed after official talks between Prime Minister Manmohan Singh and Japanese Premier Yoshihiko Noda Wednesday. Noda touches down here Tuesday on a two-day visit.

The quantum of the currency swap deal is not clear yet, but reliable sources said it would be over $10 billion. Japan’s foreign reserves have hit an all-time high of $1.3 trillion.

Details of the arrangement are with the finance ministries and the prime ministers of the two countries, Gautam Bambawale, joint secretary for East Asia in India’s external affairs ministry, told reporters here.

Several rounds of negotiations have already been held on the issue. The currency swap agreement is expected to shore up the Indian rupee as it continues to weaken against the US dollar. It could also help Indian corporates to raise cheap yen-denominated loans.

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