CURRENT AFFAIRS

Detailed explanation-1: -According to a Reserve Bank of India (RBI) statement, India and Japan have extended their bilateral swap agreements worth US$ 75 billion. The RBI and the Bank of Japan signed an amendment and restatement agreement of the bilateral swap agreement (BSA) on behalf of the Minister of Finance of Japan.

Detailed explanation-2: -28, 2022). The Bank of Japan, acting as agent for the Minister of Finance of Japan, and the Reserve Bank of India signed the Amendment and Restatement Agreement of the BSA. The BSA is a two-way arrangement where both authorities can swap their local currencies in exchange for the US Dollar.

Detailed explanation-3: -Currency swaps are used to obtain foreign currency loans at a better interest rate than a company could obtain by borrowing directly in a foreign market or as a method of hedging transaction risk on foreign currency loans which it has already taken out.

Detailed explanation-4: -Japan and India have renewed the Bilateral Swap Arrangement (BSA) the size of which is up to USD 75 billion. The BSA is a two-way arrangement where both authorities can swap their local currencies in exchange for the US Dollar.

Detailed explanation-5: -India-Japan Currency Swap: Under this, RBI will get a certain amount of yen or dollars and the Bank of Japan will get an equivalent amount in Indian rupees on a decided swap rate. After a specified period, both the countries will repay the amount at the same swap rate.