beyondbrics

Japan and India are looking to increase economic ties and a $15bn currency swap agreement, announced on Wednesday, is one way to do just that.

The new pact, sealed by Yoshihiko Noda, Japan’s prime minister and Manmohan Singh, his Indian counterpart, replaces an old $3bn swap-deal and will see the two countries swap currencies for US dollars and tap into each other’s foreign exchange reserves to ease any liquidity problems, according to the BBC.

The agreement might also provide some much needed stability to the Indian rupee, which has had a miserable 2011.

“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,” the two prime minsters said in a joint statement after their meeting in New Delhi.

The announcement accompanied agreements to bolster cooperation ahead of the 60th anniversary next year of the establishment of diplomatic ties between the two countries, according to a joint statement reported by Kyodo.

”Japan and India not only share values and strategic interests but have a mutually complementary relationship, so the potential for cooperation is huge,” Noda said at a joint press conference with Singh after the summit.

The move follows Japan’s swap-deal with China, announced on Tuesday.

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