SL to receive US$50 m out of $250 Bangladesh swap soon

Sri Lanka will be soon getting US$50 million as the first tranche of the $250 million swap facility agreed upon by Bangladesh Prime Minister Sheikh Hasina in June 2021 as a goodwill gesture on a request made by Prime Minister Mahinda Rajapaksa.

The realisation of the swap deal has been delayed due to procedural matters and the agreement was signed on August 3 by the central banks of both countries, a senior Treasury official confirmed.

Another reason for the delay was the recent downgrading of Sri Lanka’s credit ratings by international agencies; he said adding that all these issues have now been sorted out.

This was the first swap facility offered by Bangladesh to a foreign country, he disclosed adding that it will help boost the dwindling foreign reserves and the pressure on the exchange rate in Sri Lanka at present.

The financing will be made in three tranches and the country is expected to receive $50 billion first tranche soon and the balance $200 million in two tranches of $100 million each, thereafter.

The decision for the currency swap agreement was initiated during Sri Lankan Prime Minister Mahinda Rajapaksa's visit to Bangladesh in March.

Sri Lanka’s foreign reserves dropped to $2.4 billion at the end of July, from $4 billion in April and this will be a temporary relief, a veteran economic analyst said. (BS).