Sri Lanka receives US$ 1 billion long term concessionary loan from China Development Bank
The government of Sri Lanka has reportedly received a US$ 1 billion loan from the China Development Bank (CDB) with an eight-year maturity and three-year grace period.
The Central Bank of Sri Lanka announced the receipt of the loan by issuing a statement to the media.
The statement has said “the interest cost is highly competitive and linked to 6 month US dollar LIBOR (London inter-bank offered rate).
“The repayment will be in equal semi-annual payments after the grace period. The resulting inflow increases the official foreign reserves by US$1,000 million.”
The Central Bank has further stated that the government had invited to submit proposals from international and domestic banks and investment houses for a Foreign Currency Term Financing Facility (FCTFF).
This was to be denominated in United State dollar, Japanese yen or euro or of their combination up to a limit of US$1,000 million in March 2018.
Four proposals were received from international and domestic banks and investment houses.
“A Cabinet appointed Steering Committee and Technical Evaluation Committee chose China Development Bank as the syndicate arranger based on least cost and longer maturity period given in its proposal submitted,” the Central Bank has added.
OSL take:
The long term concessionary loan provided by the China Development Bank would further consolidate Sri Lanka’s economy, which is on slow yet steady growth path. Therefore, foreign investors could look at investing in Sri Lankan businesses without any fear. The Sri Lankan rupee that was on a decline is now slowly gathering momentum as well, which is another sign of a resilient economy.
| Article Code : | VBS/AT/20181019/Z_8 |