Thursday Nov 14, 2024
Thursday Nov 14, 2024
Thursday, 19 August 2021 00:22 - - {{hitsCtrl.values.hits}}
The Central Bank of Bangladesh (BB) will lend $ 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 reported.
The 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 $ 250 million to help prop up Sri Lanka’s fast-depleting foreign reserves and ease pressure on its exchange rate.
The financing will be given in three phases. The first tranche of the loan will be given this week, according to a top official of the central bank. The remaining two tranches will involve $ 100 million each.
Seeking anonymity, the BB official said 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 Libor is the global reference rate for unsecured short-term borrowing in the interbank market and acts as a benchmark for short-term interest rates.
This week, the three-month Libor is 0.14% and the six-month Libor is 0.18%.
