NEW DELHI (Reuters) -- India and Japan have agreed on a basic framework for a currency swap agreement, which would offer protection against a sudden and large withdrawal of funds, Japanese Prime Minister Shinzo Abe said on Wednesday.

Abe, on a three-day visit to India to boost trade ties, did not mention the size of the swap agreement, or when it was expected to be concluded.
“We have agreed on a basic financial framework regarding the currency swap agreement,” he told a business meeting.
In June, the Economic Times said in a source-based report the swap agreement, whereby Japan would accept rupees and give dollars to India up to a stipulated limit and India would take yen and send dollars to Japan if the need arose, could be finalized by the end of 2007.
Japan and other Asian countries have signed bilateral currency swap deals under the Chiang Mai Initiative (CMI), a seven-year-old regional network of swap deals intended to prevent a repeat of the 1997/98 Asian financial crisis.
The agreements allow a country that finds itself with short-term liquidity problems to borrow foreign exchange reserves, up to an agreed limit, from its partners to absorb heavy selling pressure on its currency.
None of the credit lines have been tapped so far.
The CMI is meant to complement the lending facilities of the International Monetary Fund.
In May, the Association of South East Asian Nations and China, Japan and South Korea (ASEAN+3) agreed to set up a self-managed reserve pooling mechanism that would strengthen the web of bilateral swaps, although full details are still being worked out