Consider the following statements regarding the renewed India-Japan Bilateral Swap Agreement: 1. It permits both countries to swap their local currencies directly without involving the US dollar. 2. The primary goal is to stabilize exchange rates and ensure liquidity during financial crises. 3. The total value of the renewed agreement is significantly less than the previous agreement, reflecting reduced financial risk. How many of the above statement is/are correct?
Only one
Why in the News?
"India and Japan Renew $75 Billion Currency Swap Agreement”
Statement 1 is incorrect
The India-Japan Bilateral Swap Agreement (BSA) is specifically designed for exchanging local currencies for US dollars, not a direct local currency swap. The US dollar acts as the intermediary currency in this agreement.
Statement 2 is correct
The BSA's core purpose is to provide a safety net, allowing both India and Japan to access needed US dollar liquidity, thus mitigating exchange rate volatility during economic downturns.
Statement 3 is incorrect
The renewed BSA maintains the $75 billion value, indicating continued financial cooperation and support, not a reduction due to perceived lower risks.
Similar Questions
Which of the following best describes the primary objective of the Uttarakhand government's collaboration with Iceland?
Consider the following statements with reference to Ocean Coordination Mechanism (OCM):
1. The Intergovernmental Oceanographic Commission of UNESCO has recently signed a MoU to establish Ocean Coordination Mechanism for the Wider Caribbean Region.
2. It will receive funding from the Global Environment Facility (GEF).
Which of the above statements is/are correct?
Important Questions from Agreements and MoU
- Reciprocal Provision of Supplies and Services Agreement has been signed by India and which of the following countries?
- Which two companies signed a Joint Venture Cooperation Agreement (JVCA) for the production of HAMMER smart precision guided Air-to-Ground weapons in India in November 2025?
- In 2025, Saudi Arabia signed a major security agreement with which country to strengthen military cooperation amid regional tensions?
In July 2025, which of the following firms entered into a binding agreement to form a 50:50 domestic reinsurance joint venture to serve the insurance market in India?
- Which company signed an MoU with the Aeronautical Development Agency (ADA) during Aero India 2025, for the development of Flight Control Actuators for the AMCA programme?
