Central Bank of Sri Lanka (CBSL) is yet to formally announce the finalisation of the $ 200 million currency swap with Bangladesh, despite the latter having confirmed same. 

Bangladesh media has been extensively reporting of its central bank approving the deal on Sunday. 

When Sri Lanka and China did a similar deal worth CNY 10 billion (around $ 1.5 billion), the Central Bank confirmed it on 22 March as well as the $ 400 million swap deal with India in July 2020.

Newsage of Bangladesh, early this week, reported that the Bangladesh Bank board on Sunday approved in principle a draft $ 200 million currency swap deal with Sri Lanka, which has been struggling to maintain a moderate foreign exchange reserve.

The currency swap agreement will be finalised after being legally vetted by Government-approved lawyers, BB officials told New Age after the meeting.

BB Governor Fazle Kabir chaired the meeting at its headquarters in Dhaka.

Under the draft currency swap proposal, the BB would provide up to $ 200 million in foreign currency to meet Sri Lanka’s foreign currency expenditures, the officials said.

Against the fund, Sri Lanka would keep the same amount of its local currency, the Rupee, with the Bangladesh Bank along with a Government guarantee.

The BB would get around 1-2% plus LIBOR from Sri Lanka as interest.

The currency swap agreement also contains a rollover condition, allowing Sri Lanka to extend the period of repayment of the loan, the BB officials said.

The currency swap initiative was taken after Prime Minister Mahinda Rajapaksa’s visit to Bangladesh to join the celebrations of the golden jubilee of Bangladesh’s independence.

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