Japan Current Affairs - 2019
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The Union Cabinet has approved India’s Currency Swap Agreement with Japan. The $75-billion bilateral currency swap arrangement is a milestone in mutual economic cooperation and special strategic and global partnership between two countries.
Currency Swap Agreements
A Currency swap agreement is a foreign exchange agreement between two parties to exchange a given amount of one currency for another and, after a specified period of time, to give back the original amounts swapped.
How Currency Swap Agreement can benefit India?
The currency swap agreement can be beneficial to India in the following ways:
- The currency swap facilities make it easier for India to pay for its imports. This aids in addressing the challenge of depreciation.
- Since the Currency swap agreement involves trading in local currencies. Countries pay for imports and exports through their own currencies rather than involving a third country currency. This does away with the charges involved in multiple currency exchanges.
- The currency swap makes it easier to improve liquidity conditions.
- Currency swap agreements help in saving for a rainy day when the economy is not looking in good shape.
- The swap agreements also contribute towards stabilising the country’s balance of payments (BoP) position.
- The agreement aids in improving the confidence in the Indian market.
- Together with ensuring that the agreed amount of capital is available to India, it also brings down the cost of capital for Indian entities while accessing the foreign capital market.
The Currency Swap Agreement was concluded between Prime Minister Narendra Modi and Japan’s Prime Minister Shinzo Abe during the summit level meeting at Yamanashi, Japan.
The Henley Passport Index measures the access each country’s travel document affords. The Index is based on the data provided by the International Air Transport Authority (IATA) and covers 199 passports and 227 travel destinations.
Ranking of the Jurisdictions
The Rankings of the jurisdictions based on the rankings in the Henley Passport Index are:
- Japan retained its top spot as the world’s most travel-friendly passport due to the document’s access to 190 jurisdictions.
- South Korea and Singapore are at joint second position offering access to 189 jurisdictions.
- China has jumped almost 20 places in just two years, from 85th in 2017 to 69th this year.
- India jumped two positions from 81st in 2018 to 79th this year.
- European Union member states along with Norway and the US occupy the places behind the top three nations in the rankings.
- The rankings of the USA and UK have continued to drop.
- The top 5 positions are held by Japan (190 countries), Singapore, South Korea (189), France, Germany (188), Denmark, Finland, Italy, Sweden (187), and Luxembourg, Spain (186)
- The bottom 5 positions are held by Eritrea (38), Yemen (37), Pakistan (33), Somalia, Syria (32)and Afghanistan, Iraq (30).
Christian Kalin, Chairman of the Henley & Partners’ Group who is also the creator of the index notes that the ranking is a bright spot in an increasingly isolationist world.
Open-door policies have the potential to contribute billions to the global economy, as well as create significant employment opportunities around the world. The ascent in the rankings of South Korea and the United Arab Emirates are examples of what happens when countries take a proactive foreign affairs approach, an attitude which significantly benefits their citizens as well as the international community.
Tags: Afghanistan • China • Denmark • Eritrea • Finland • France • Germany • Henley Passport Index • Iraq • Italy • Japan • Luxembourg • Pakistan • Singapore • Somalia • South Korea • Spain • Sweden • Syria • UK • USA • Yemen