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.
‘A need arises to examine the issue of currency swap agreement and its impact on the Indian trade policy ... the matter is of particular interest to Ministry of Commerce,’ a senior government official said.
Senior officials of Commerce and Finance ministries will discuss the issue later this month. The meeting, scheduled for 20 August, will also be attended by Reserve Bank officials. 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. The meeting is taking take place at a time when several countries are ‘actively engaged’ in entering into currency swap agreements with their counterparts.
Currency swap agreements involve exchange of one currency for another currency and are generally motivated by the comparative advantage.
The Commerce Ministry has already sought views of the Centre for WTO Studies, a Delhi-based institute, on the impact of currency swap agreements on trade policy. The institute, in its concept paper said such agreements help in fund management and currency risk management,
among other things.
‘A need arises to examine the issue of currency swap agreement and its impact on the Indian trade policy ... the matter is of particular interest to Ministry of Commerce,’ a senior government official said.
Senior officials of Commerce and Finance ministries will discuss the issue later this month. The meeting, scheduled for 20 August, will also be attended by Reserve Bank officials. 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. The meeting is taking take place at a time when several countries are ‘actively engaged’ in entering into currency swap agreements with their counterparts.
Currency swap agreements involve exchange of one currency for another currency and are generally motivated by the comparative advantage.
The Commerce Ministry has already sought views of the Centre for WTO Studies, a Delhi-based institute, on the impact of currency swap agreements on trade policy. The institute, in its concept paper said such agreements help in fund management and currency risk management,
among other things.