Reserve Bank of India signs US$400mn swap deal for Sri Lanka

The Reserve Bank of India has signed document for a US$ 400 million currency swap facility to Sri Lanka till November 2022, the Indian High Commission in Colombo said.

The High Commission has conveyed this information to senior officials in the Government of Sri Lanka and the Central Bank of Sri Lanka. Earlier, on July 14, Deputy High Commissioner Vinod K. Jacob had met and discussed the currency swap arrangement with the Governor of the Central Bank of Sri Lanka, Prof. W.D. Lakshman.

The High Commission said it has remained closely engaged in fruitful bilateral cooperation with Sri Lanka on all matters of mutual interest. On 22 July, the High Commission facilitated constructive technical discussions on rescheduling of bilateral debt repayment by Sri Lanka.

“These positive developments illustrate active implementation of the leadership-level commitment to work together for addressing the challenges arising from the COVID-19 pandemic, and further the mutually beneficial India-Sri Lanka partnership, including in the economic domain,” the High Commission said.

Earlier this year President Gotabaya Rajapaksa had asked Indian Prime Minister Narendra Modi for USD 1.1 billion as a special swap facility to help Sri Lanka deal with foreign exchange issues.

During a telephone discussion between Rajapaksa and Modi the Sri Lankan President had requested the Government of India to provide USD 1.1 billion as a special swap facility to top up USD 400 million under the SAARC facility, saying it would enormously help Sri Lanka in dealing with its foreign exchange issues.

In turn, the Indian Premier has assured that he is personally committed to help Sri Lanka. “We are ready to help under terms that are favorable to Sri Lanka.”

He suggested that Sri Lanka appoint an official to work directly in this regard with the Colombo based Indian High Commissioner.

India has had a Framework on Currency Swap Arrangement for SAARC Member countries since 2012.

The facility is available to all SAARC member countries with a floor of USD 100 million and ceiling of USD 400 million within overall limit of USD 2 billion. (Colombo Gazette)