Reserve Bank of India and Bank of Japan have concluded an agreement that expands the maximum amount of the Bilateral Swap Arrangement (BSA) between Japan and India to $50 billion. With this agreement, the current BSA, effective for 3 years from 2012 to 2015, is expanded from the original size of $15 billion, the RBI said in a statement. The BSA will now enable both countries to swap their local currencies (i.e., either Japanese yen or Indian rupee) against the dollar for an amount up to $50 billion. The BSA was signed by Governor Haruhiko Kuroda of the Bank of Japan and Governor Raghuram G. Rajan of the Reserve Bank of India and has become effective from January 10. The BSA aims at addressing possible short-term liquidity difficulties and supplementing the existing international financial arrangements, as one of the efforts in strengthening mutual cooperation between Japan and India.
