Currency Swap Agreement with Japan and Bhutan

• India is exploring possibilities of entering into currency swap agreements with trade partners aiming to shore up exports and bring down trade deficit, which is putting pressure on the rupee.

• India has signed currency swap agreements with Japan ($ 15 billion) and Bhutan ($ 100 million). China has shown active interest in entering into such an agreement with India but it is yet to be signed.

• Currency swap agreements involve exchange of one currency for another currency and are generally motivated by the comparative advantage.