Japan and India have launched a new framework to provide bilateral credit in US dollars. The aim is to ease the impact on Asia of possible turmoil in global financial markets.
Japanese Prime Minister Yoshihiko Noda and his Indian counterpart Manmohan Singh signed a basic agreement in December of last year. The two countries finalized the details on Tuesday, according to Japan's (NHK WORLD) website. Under the new framework, the Japanese and Indian central banks will exchange up to 15 billion dollars for 3 years. The deal is aimed at protecting India from a possible currency shortage if an international financial crisis hits the country. Europe's credit turmoil caused the rupee to weaken when foreign investors pulled their capital out of India. Japanese officials say Japan wants to stabilize Asian financial markets and to strengthen economic ties with India.