Published: 3 March 2026Economy
RBI and Bank of Japan Renew $75 Billion Bilateral Swap Arrangement
The Reserve Bank of India and the Bank of Japan renewed their bilateral swap arrangement for USD 75 billion, effective February 28, 2026. This arrangement strengthens financial cooperation between the two nations and provides a safety net to tackle short-term liquidity difficulties and supplement existing international reserves.
The swap facility enables both central banks to exchange their respective currencies (Indian Rupee and Japanese Yen) for US dollars, bolstering confidence in India's external sector stability. Japan has been a key partner in India's infrastructure development through JICA loans for metro rail, bullet train, and industrial corridor projects.
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Linked questionMedium
The RBI's CRR reduction will release approximately how much liquidity by end-November 2025?
Explanation · Correct answer CThe phased CRR reduction will release approximately ₹2.5 lakh crore into the banking system.
Frequently asked questions
What did the RBI and Bank of Japan renew in February 2026 and for how much?
The **Reserve Bank of India (RBI)** and the **Bank of Japan** renewed their **bilateral swap arrangement for USD 75 billion**, effective **February 28, 2026**. It provides a safety net to tackle short-term liquidity difficulties.
How does the RBI-Bank of Japan bilateral swap arrangement work?
The **USD 75 billion swap facility** enables both central banks to exchange their respective currencies — **Indian Rupee and Japanese Yen** — for **US dollars**, bolstering India's external sector stability and supplementing international reserves.
What infrastructure projects has Japan supported in India through JICA loans?
**Japan** has supported India's infrastructure through **JICA loans** for **metro rail, bullet train (Mumbai-Ahmedabad HSR), and industrial corridor projects**. The renewed **USD 75 billion swap** reinforces this key bilateral partnership.
Why is the RBI-Bank of Japan swap arrangement significant for India's external sector stability?
The **USD 75 billion bilateral swap arrangement** supplements India's international reserves and provides a safety net for **short-term liquidity difficulties**, boosting confidence in India's external sector. It was renewed effective **February 28, 2026**.
How much is India's bilateral swap arrangement with Japan's central bank?
The **RBI-Bank of Japan bilateral swap arrangement** is valued at **USD 75 billion**, renewed effective **February 28, 2026**. It allows exchange of the **Indian Rupee and Japanese Yen** for US dollars to support financial stability.
