Sri Lanka eyes US Fed Reserve US$1 billion Repo facility

Sri Lanka will be exploring possibility of obtaining a US$1 billion Repo facility from the US Federal Reserve (FR) to meet the country’s monetary needs.

Central Bank Senior Deputy Governor Nandalal Weerasinghe told the monthly monetary policy review media briefing in Colombo on Thursday that the FR has offered Sri Lanka this Repo facility opened for foreign central banks including Sri Lanka.

“The CB will have to settle debt service payments from its foreign reserves as and when it is not bringing new money towards this end,” Dr. Weerasinghe said.

Sri Lanka has not used this facility up now, he said adding that if the country is faced with liquidity issues in the long run it would be useful to tackle financial needs
 
The Repo Facility will allow foreign central banks and other international monetary authorities to temporarily exchange their US Treasury securities held with the FR for U.S. dollars.

To access the facility, such institutions will use their accounts with the FR of New York.

The sales will be conducted through the FR’s Open Market Account. The Repo Facility opened on April 6 and will remain open for at least six months. (Bandula)