BANK OF JAPAN, RBI INK PACT FOR RAISING BSA TO $ 50 billion

The Reserve Bank of India (RBI) and Bank of Japan (BOJ) signed an agreement to enhance the maximum amount of the Bilateral Swap Arrangement (BSA)between the two countries to $50 billion. The agreement signed by RBI Governor Raghuram Rajan and BOJ Governor Haruhiko Kuroda. The BSA shall be effective until December 3, 2015.

• With this agreement, the current BSA, effective for 3 years from 2012 to 2015, has been raised from the original size of $15 billion.
• Outcome: The expansion of the BSA will contribute to the stability of global financial markets including emerging economies.
• Aim of BSA: To address possible short-term liquidity difficulties and supplement the existing international financial arrangements and is one of the efforts in strengthening mutual cooperation between India and Japan.