RBI inks a pact with Bank of Japan 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.
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Month: Current Affairs - January, 2014