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.
No.820, Mount Cresent,Malabe,Sri Lanka