$200 Million Currency Swap With Bangladesh 
Posted 25,May

By Chaveendra Dunuwille

In Local News

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In an attempt to maintain Sri Lanka’s dwindling foreign currency reserves the  government has conducted a series of currency swaps. Bangladesh now joins the  list of swap countries which included the likes of China and India. 

While Bangladesh foreign currency reserves stand at $45 billion the latest data  shows that Sri Lanka’s foreign currency reserves stand at a mere $4.5 billion  which is the result of the outbreak of the pandemic which severely affected the  tourism sector of the nation. The foundations for the currency swap was laid  down when Prime Minister Mahinda Rajapaksa visited the nation to celebrate its  golden jubilee of independence. 

In the meeting chaired by the Governor of The Bangladesh Bank Fazle Kabir in  the bank headquarters located in Dhaka they had approved in principle a draft  for a currency swap of $200 million. According to the agreement the Bangladesh  Bank would also keep the same amount of currency, the Sri Lankan Rupee (LKR)  in its foreign reserve. The BB would get 1-2% interest plus LIBOR while Sri Lanka  which approved the agreement after being vetted by lawyers has the advantage  of a rollover condition that allows Sri Lanka to extend the repayment period.