$3 billion currency swap agreement reached with India

NEW DELHI (Kyodo) Japan and India reached a basic agreement Wednesday to conclude a currency swap pact to help ward off financial crises, Japanese officials said.

The agreement was reached at a meeting between Prime Minister Shinzo Abe and his Indian counterpart, Manmohan Singh.

While details have yet to be worked out, the two governments envisage contributing up to $3 billion each out of their foreign-currency reserves for use to prevent the yen or rupee from plunging in value in case of speculative attacks on the currencies.

Japan expects the currency-exchange deal to help reinforce its economic relationship with India.

The two governments hope to put the pact into effect by the end of this year, the officials said.

The Asian currency crisis of 1997 prompted Japan, China, South Korea and the 10 members of the Association of Southeast Asian Nations to work toward bilateral current-exchange arrangements.

These 13 countries are now negotiating a multilateral accord to pool funds, which India may join in the future, they said.