The proposal will add to regional network of such accords designed to provide emergency financial liquidity to either or both parties in times of turbulence in currency market, officials said. Japan’s Ministry of Finance and Reserve Bank of India have already completed two rounds of negotiations on the issue, they added.
Counter speculation
Once the agreement is finalised, both countries would be able swap foreign exchange reserves to counter speculative moves on their currencies.
In other words, Japan will accept rupees and give dollars to India up to a stipulated limit, and similarly India will take yen and send dollars to Japan if need arises. For India, it will be a major safeguard even if the foreign exchange reserves come down in future, they noted. It will also enable both countries to swap foreign currencies like US dollar or Euro to maintain the value of Rupee and Yen in foreign exchange markets. Japan has swap deals with other Asian countries like Thailand, Korea, China,  Malaysia, Philippines, Singapore and Indonesia.
Addressing an interactive session with the Indian chambers of commerce and industry here, Mr Abe said, Japan was also in favour of the early conclusion of Comprehensive Economic Partnership Agreement (CEPA) to boost bilateral economic relations.
Stressing for early conclusion of CEPA, he projected that Indo-Japan trade turnover would reach $20 billion by 2010. Mr Abe, is accompanied by large business delegation comprising 200 top executives from major Japanese companies.
Union Commerce & Industry Minister Kamal Nath, in his address said that apart from benefiting the country’s industrial infrastructure development, the Indo-Japan economic engagement in the proposed Delhi-Mumbai Industrial Corridor Project would become a new springboard for Japanese companies for accessing the US and EU markets.   
TO STOP GLOBAL WARMING
ICICI, Japan Bank ink $200 m pact
Mumbai, DHNS: Japan Bank for International Cooperation (JBIC) and ICICI Bank, on Wednesday, signed an untied loan agreement totalling yen equivalent of US$200 million aimed at contributing towards prevention of global warming.
The loan is co-financed by private financial institutions  — Sumitomo Mitsui Banking Corporation (agent bank), Bank of Tokyo-Mitsubishi UFJ, Mizuho Corporate Bank, Hongkong & Shanghai Banking Corporation (Tokyo Branch) and Societe Generale Tokyo Branch), with JBIC providing a guarantee for their co-financing portions, said a joint statement here.
The loan is aimed to providing finance to prospective CDM (clean development mechanism) projects through ICICI Bank in India in which Japanese companies show an interest with regard to purchasing emissions reduction credits and obtain a preferred negotiation status for emissions reduction credits.