India and Japan may finalise currency swap agreements by the end of this year and have already completed two rounds of negotiations, the Economic Times daily reported on Sunday, citing sources close to the development.
Under the agreement Japan will accept rupees and give dollars to India up to a stipulated limit, and India will take yen and send dollars to Japan if the need arises, the paper said. For India an agreement will be a safeguard if the foreign exchange reserves fall in the future, the Economic Times said.
While it will be India's first currency swap agreement with any country, Japan already has similar arrangements with countries such as China, South Korea, Malaysia, Thailand and Philippines, the paper said.
Reserve Bank officials could not be immediately reached. Japan has foreign exchange reserves of more than $900 billion, and Indian reserves have crossed $200 billion.