Russia and China have taken several steps, such as cross-border interbank payment systems, alongside SWIFT. Both have increased their gold stocks to support their currencies and have launched national currency exchange agreements in several regional and bilateral agreements in which they play a role. India and Japan signed a currency exchange agreement during Prime Minister Modi`s visit to Japan on October 28, 2018. The currency exchange agreement is for $75 billion and is a great opportunity for India to get foreign currency by exchanging rupee in Japan. Bilateral trade between the two countries reached about US$52 billion in 2017, according to the Indian Embassy in the United Arab Emirates. In 2015, China`s Central Bank extended a currency swap agreement with the Central Bank of the United Arab Emirates for $5.54 billion. The swap is for 2 billion dirhams or 35 billion Indian rupees ($496 million), depending on the central bank claiming the amount, a statement from the Indian embassy said. There is often turbulence when a country is faced with a currency shortage, which can lead to a currency crisis and a sharp depreciation of the national currency. In such a scenario, if the central bank/government (read the RBI/government) is able to obtain a considerable foreign currency by exchanging the national currency, it ensures the availability of the foreign currency. This will avoid turbulence on the foreign exchange market or the devaluation of the national currency crisis. As a result, all these countries have established ties with China and Russia for trade and economic sustainability.
Russia sells crude oil from Venezuela. China diverted Iranian crude oil with payments in yuan and launched the Iran-China Silk Road Deals. China is now Iran`s largest trading partner. Iran has diversified trade with Afghanistan and oil for gold with India. ABU DHABI (Reuters) – India and the United Arab Emirates signed a currency swap agreement on Tuesday to boost investment and allow direct trade without the use of dollars or other international currencies. India has focused on persuading countries to reach this agreement, where India has a large or large trade deficit with that country. In this way, contributions are always payable in rupees, which avoids the need to pay “currency” in US dollars, euros or whatever. Once the Ministry of Finance has approved the country by which such an agreement would benefit both parties, the Ministry of Commerce will assume responsibility for initiating bilateral discussions with a view to reaching an appropriate agreement. Currency swap with Japan will help India calm the pejorative trend of the rupee.
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