05 December 2012, Japan and India have signed a currency exchange deal that could prop up the U.S. dollar.

Banking officials from the two Asian countries have been working on the plan for about a year.  It involves the central banks of Japan and India exchanging up to $15 billion USD per year for the next three years.

They say the exchanges done in U.S. dollars will stabilize their own currencies.  It could prop up the value of the U.S. dollar, which would hurt U.S. factories (who’re still operating in the U.S.) who want to export their products. Japan has been blaming the rising value of their yen on the falling value of the U.S. dollar.

India is blaming the value of the European Union’s euro, for the rupee’s problems.

When a country’s money becomes more valuable it actually hurts their exports because it makes their products more expensive to foreign buyers. The only way for any country to achieve high economic growth is to have strong exports, a strong domestic economy can only achieve stagnation at best (relative to the size of the country).