India and Japan today decided to expand their currency swap arrangement from USD 15 billion to 50 billion to strengthen bilateral financial cooperation and stabilise the global financial markets.
The decision to expand bilateral currency swap was taken during a meeting between Prime Minister Manmohan and Japanese Deputy Prime Minister Taro Aso on the sidelines of G-20 summit here. The two governments expect that this will contribute to the stability of global financial markets including emerging economies, according to a joint statement after the meeting.
The decision came a day after Singh called for extensive consultations within the G-20 grouping to tackle the current currency crisis.
Singh had said that India has been affected by currency volatility in the past few weeks and was taking steps to finance the current account deficit (CAD) in an environment that is seen to be friendly for stable foreign capital flows.
They also reiterated the importance of continued reforms in financial and investment sectors for promoting stable and long term capital inflows into India.
The two governments believe that these policy measures will strengthen the bilateral financial cooperation between Japan and India, the statement said.