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Sri Lanka to engage in US$ 200 million currency swap with Bangladesh Bank

Sri Lanka to engage in US$ 200 million currency swap with Bangladesh Bank

Bangladesh Bank has reportedly approved a US$ 200 million currency swap with the Central Bank of Sri Lanka, which is to be backed by a government guarantee.
The Dhaka Tribune newspaper quoting a Central Bank official has stated that the Bangladesh Bank has in principle approved the deal but it has to get government approval.
“..The Bangladesh Bank approved in principle a $200 million currency swap proposal with Sri Lanka, a country struggling to maintain a moderate foreign exchange reserve,” the Dhaka Tribune newspaper has stated.
“However, the currency swap agreement will be finalized after being vetted by the government, a senior central bank official said after the meeting.”
“Against the fund, Sri Lanka would keep the same amount of its local currency at the Bangladesh Bank along with a government guarantee.”
According to local media reports, Sri Lanka had initiated the swap with Bangladesh when Sri Lanka’s Prime Minister Mahinda Rajapaksa visited Bangladesh recently accompanied by Sri Lanka’s State Minister of Money and Capital Markets Nivard Cabraal.

OSL take:

Sri Lanka’s economy has shown great resilience to external and internal challenges through the years and is once again on the path to recovery after facing the impact of the global Covid 19 pandemic. The aggressive development programme launched by the country and the continued expansion of operations in key economic sectors have made the island an attractive investment opportunity. Sri Lanka is fast becoming a business hub in the South Asian region given it’s geographical positioning in the Indian ocean and the many trade agreements as well as trade concessions enjoyed by the country. Bilateral and multilateral institutions and donors have therefore shown confidence in engaging in financial dealings with Sri Lanka.

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Article Code : VBS/AT/03062021/Z_4

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