China Aids Sri Lanka with Currency Swap of 10 Billion Yuan amounting to $ 1.5 Billion; Central Bank Governor Cabraal States Sri Lanka’s Official Foreign Reserves have Increased to $3.1 Billion After Recent Foreign Currency Inflow

BY Shenal Fernando

The People’s Bank of China (PBoC) released a receipt of the ¥ 10 billion (equivalent to $ 1.5 billion) currency swap to the Central Bank of Sri Lanka (CBSL) yesterday (29), increasing the official foreign reserves of Sri Lanka to $ 3.1 billion, according to the CBSL.

CBSL Governor Ajith Nivard Cabraal announced yesterday on his official Twitter handle that due to the receipt of recent foreign exchange inflows, the official foreign reserves position of the country had reached approximately the aforementioned level and will remain at that level until the end of 2021. Neither Cabraal nor the CBSL in its press release issued yesterday, specified the exact source of the recent foreign exchange inflows.

However, speaking to The Morning Business yesterday, a high-ranking source in the CBSL confirmed that this increment in the official reserves position of the country was due to the receipt of the ¥ 10 billion swap from China. It was further stated that the discussion relating to the $ 1.9 billion financial assistance from India has reached its final stages.

This expected financial assistance from India will be in the form of a $ 400 million currency swap to help Sri Lanka address the existing balance of payment (BOP) issues; a $ 1 billion line of credit to cover the import of food, medicines, and other essential items from India to Sri Lanka; and a $ 500 million line of credit to cover the import of fuel from India.

Courtesy:The Morning