Tokyo, October 29: Amid the 'historic downslide' of the rupee, Prime Minister Narendra Modi's visit to Japan yielded a major success for the Indian capital market. At the conclusion of the bilateral summit, the two sides inked a $75-billion currency swap agreement, which is expected to bring stability to their respective currencies.

A similar pact was sealed between Tokyo and New Delhi in 2013, when the rupee was under stress due to the then unprecedented crude oil prices. The agreement, however, limited the swap to $15 billion -- which necessitated the two sides to sign a new deal where the quantum of swap could be increased to $50 billion. PM Modi, Shinzo Abe Ask Pakistan to Bring Mumbai, Pathankot Terror Attacks Perpetrators to Justice.

"The Prime Ministers of India and Japan, building on great friendship between the two countries and to further strengthen and widen the depth and diversity of economic cooperation, agreed during Prime Minister Modi’s visit to Japan, to conclude a Bilateral Currency Swap Agreement for an amount of USD 75 billion," a release of the Ministry of Finance read.

The statement further noted that the arrangement particularly reflects the depth of mutual trust and understanding, personal relationship and warmth between the two leaders built over many years.

"This arrangement between Japan and India has been the high point of economic and financial agreements between the two countries, during the visit of the Prime Minister of India. This represents an increase of 50 per cent over the last currency swap arrangement between the two countries. It is indicative of close bonds between the two countries nurtured by the two leaders.

As reported, Prime  Minister of Japan Shinzo Abe has said that he is a friend of India forever," the statement added. The arrangement would help in bringing greater stability to foreign exchange and capital markets in India.

"With this arrangement in place, prospects of India would further improve in tapping foreign capital for country’s developmental needs. This facility will enable the agreed amount of foreign capital being available to India for use as and when the need arises," the statement added.

The rupee is currently trading at 73.57 against the US dollar -- a slight improvement from the historic low of 74.27 it had clocked earlier in the month.

(With PIB inputs)

(The above story first appeared on LatestLY on Oct 30, 2018 05:56 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).