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Sri Lanka Reverts To $400 Million Overseas Foreign money Swap With RBI


The Sri Lanka-RBI swap deal got here beneath the amenities out there to SAARC nations in 2020.

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

Sri Lanka initially signed the swap deal out there to SAARC nations in 2020 and repaid it in February 2021 after rolling it over as soon as. On February 1, the Sri Lankan Central Financial institution settled the USD 400 million forex swap facility from the RBI. Central Financial institution Governor Lakshman stated the identical swap could possibly be obtained after August.

The Sri Lanka-RBI swap deal got here beneath the amenities out there to SAARC nations in 2020. Just a few weeks again, Sri Lanka entered a 200 million greenback swap with the Bangladesh central financial institution. Lakshman stated the signing of the settlement for the Bangladesh swap would occur quickly.

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 had been badly hit.

The SAARC forex 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 power is offered to all SAARC member nations, topic to their signing the bilateral swap agreements. 

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