Thursday, June 24, 2021
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Sri Lanka Reverts To $400 Million Foreign Currency Swap With Reserve Bank Of India (RBI)

The Sri Lanka-RBI swap deal got here beneath the amenities accessible to SAARC international locations in 2020.

Sri Lanka on Friday mentioned that its Central Bank will return to a $ 400 million overseas foreign money swap with the Reserve Bank of India as a part of measures to spice up the nation’s overseas reserves hit by the COVID-19 pandemic. Central Bank Governor W D Lakshman mentioned the nation can draw down on the USD 400 million overseas change swap with the RBI in August 2021.

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Sri Lanka initially signed the swap deal accessible to SAARC international locations in 2020 and repaid it in February 2021 after rolling it over as soon as. On February 1, the Sri Lankan Central Bank settled the USD 400 million foreign money swap facility from the RBI. Central Bank Governor Lakshman mentioned the identical swap could possibly be obtained after August.

The Sri Lanka-RBI swap deal got here beneath the amenities accessible to SAARC international locations in 2020. A couple of weeks again, Sri Lanka entered a 200 million greenback swap with the Bangladesh central financial institution. Lakshman mentioned the signing of the settlement for the Bangladesh swap would occur quickly.

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Sri Lanka has to pay a billion US greenback sovereign bond in July 2020. Sri Lanka had 4.4 billion US {dollars} of reserves in April 2021. COVID-19 struck Sri Lanka in March 2020, placing its overseas reserves beneath pressure since, as tourism, employee remittances and exports have been badly hit.

The SAARC foreign money swap framework got here into operation on November 15, 2012, to offer a backstop line of funding for brief time period overseas change liquidity necessities or short-term steadiness of funds stress until long run preparations are made.

The facility is offered to all SAARC member international locations, topic to their signing the bilateral swap agreements. 

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