Sri Lanka to receive first tranche of US$ 50 million out of US$ 250 million from Bangladesh
The Central Bank of Bangladesh (BB) will lend US$ 50 million to under-pressure Sri Lanka this week as part of Bangladesh’s efforts to support the island nation suffering from a foreign exchange crisis, Bangladesh newspaper The Daily Star has reported.
The report has stated that credit under the first-ever loan to any country from Bangladesh will be given under the currency swap agreement inked by the BB and the Central Bank of Sri Lanka (CBSL) on 3 August.
As per the deal, the BB will provide a total of US$ 250 million to help prop up Sri Lanka’s fast-depleting foreign reserves and ease pressure on its exchange rate, The Daily Star has stated.
The financing will be given in three phases with the first tranche of the loan being given this week, according to a top official of the BB Central Bank.
The remaining two tranches will involve US$ 100 million each.
Seeking anonymity, the BB official has been quoted as saying the Central Bank would give the first tranche for three months.
The CBSL will return the amount in three months at the interest rate of the London Interbank Offered Rate (Libor) plus 2%. If it can’t honour the deadline, the interest rate will not change. But if the tenure goes up to six months, the interest rate will be Libor plus 2.5%, the news report has added.
The financial assistance secured by Sri Lanka from Bangladesh is indicative of the confidence of foreign countries on Sri Lanka’s economic growth. Despite the global pandemic, Sri Lanka’s economy continues to expand slowly, but steadily with several key economic sectors in the country recording a growth momentum. Sri Lanka’s ongoing development programme and the positioning as an emerging business hub in the South Asian region, have made Sri Lanka an attractive destination to explore business/investment opportunities. Sri Lanka’s geographical positioning in the Indian ocean, the many trade agreements and trade concessions enjoyed by the country as well as the ease of doing business environment in the country have also boosted Sri Lanka’s attraction as a business/investment destination in the region.
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