ST. PETERSBURG, RUSSIA – Japan and India agreed Friday to boost their bilateral currency swap agreement to $50 billion from $15 billion, aiming to help stabilize global financial markets, including those of emerging nations, the Finance Ministry said in Tokyo.
The deal was reached during talks between Indian Prime Minister Manmohan Singh and Finance Minister Taro Aso, who concurrently serves as deputy prime minister, on the sidelines of the Group of 20 summit in St. Petersburg, Russia, the ministry said.
The agreement comes amid concern that the U.S. Federal Reserve’s anticipated winding down of its monetary stimulus could trigger an outflow of capital from emerging nations and a depreciation of their currencies, sparking inflation that would hurt their economies.
Japan and India also reaffirmed that it is necessary to continue reforming financial and investment sectors to promote stable capital inflows into India in the long term, the ministry said.
In a joint statement, the two countries said they “believe that these policy measures will strengthen the bilateral financial cooperation between Japan and India.”