Three billion dollar swap between RBI and Bank of Japan approved

New Delhi, Mar 27 (UNI) To ease the short term Balance of Payment (BOP) problem, the Cabinet today approved for authorising the Reserve Bank of India to sign the proposed currency swap agreement with the Bank of Japan to exchange an amount of three billion dollars against the respective domestic currency.

The exchange will be against the respective domestic currency for mitigating short term Balance of Payment (BOP) problem, a Cabinet spokesperson told reporters here.

''The actual draw down will be effected by RBI when the government judges that it should be drawn down, after consulting RBI,'' the spokesperson added.

This is an additional arrangement outside IMF to meet for short term liquidity in dollars during a BOP crisis.

The move is billed as a cost effective tool of achieving the strategic objective of demonstrating regional cooperation.

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