Sri Lanka signs $400mn currency swap facility with RBI to meet short term financial needs
Jul 24, 2020
Colombo [Sri Lanka], July 24 : Sri Lanka on Friday signed a USD 400 million currency swap agreement with India's Reserve Bank of India (RBI), valid till November 2022, to meet short-term international liquidity requirements following the economic crisis resulted from COVID-19.
The development comes as a relief to Sri Lanka amidst COVID-19 and will help in its post-pandemic economic recovery, the High Commission of India in Colombo, Sri Lanka said.
The High Commission said that the agreement has been reached after the debt repayment rescheduling discussions held on Wednesday, adding that this development is another example of India's strong commitment to work with Sri Lanka in post-COVID-19 economic recovery.
On 22 July 2020, India and Sri Lanka held a technical discussion on the rescheduling of the bilateral debt repayment.
The Indian delegation comprising of senior officials from the Ministry of External Affairs, the Ministry of Finance, and the EXIM Bank interacted with representatives from the Department of External Resources of Sri Lanka through a video conference, as per reports by Colombo Page.
The constructive discussion between both sides took place in a cordial and positive atmosphere, the High Commission reported.
Both sides had earlier discussed the ongoing COVID-19 pandemic and its likely health and economic impacts in the region during Prime Minister Narendra Modi's telephone conversations with Sri Lankan President Gotabaya Rajapaksa on May 23 and Prime Minister Mahinda Rajapaksa on May 27. During these conversations, Prime Minister Modi had assured that India would continue to provide all possible support to Sri Lanka for mitigating the effects of the pandemic.
During the courtesy call on President Gotabaya by Indian High Commissioner Gopal Baglay on May 29, it was agreed to accelerate India's participation in Sri Lanka's post-COVID economic recovery.
Building on the mutual priorities identified during the telephone conversations between the leaders of India and Sri Lanka in May 2020 and High Commissioner's courtesy call on the President of Sri Lanka, the High Commission of India engaged with the Government of Sri Lanka to facilitate the initiation of discussions between the two sides on this matter.
The next round of technical discussions between the two sides on the rescheduling of debt repayment is expected to be held soon.
The Indian High Commission said it will continue to work towards coordinating and facilitating such engagement as a part of India's overall commitment to work with Sri Lanka to counter and mitigate the effects of the COVID-19 pandemic.
