SL to start money transfers from China’s 10 billion yuan swap

Sri Lanka is now ready to swap currencies with China under a 10 billion yuan (about US$1.5 billion) deal aimed at promoting trade and investment between the two countries, Finance Ministry sources divulged. 

The Government has requested Chinese authorities to disburse the 10 billion yuan swap which was on hold as a standby facility on the directions of the Central Bank since last year, a senior official of the ministry said. 

Talks had been initiated by the Finance Ministry and Central Bank for the release of the currency swap valid for three years as the country needs foreign exchange to tackle economic woes at present, he added.

Another reason for the delay in the disbursement of the swap facility was some issues in the context of the technicalities of the agreement, he claimed.

Sri Lanka signed a three-year US$1.5 billion (Yuan 10 billion) currency swap deal with China in March 2021 to further promote trade and investments, he said adding that the currency swaps allow Central Banks to ensure banks in their countries can borrow ready cash in any currencies.

This will enable Sri Lanka to service Chinese bank loans and other financial obligations, he said pointing out that the country will seek further assistance from the Government of China in overcoming the economic challenges.

He noted that China has already provided $2.8 billion financial facilities without any additional conditions. (Bandula)