The Central Bank of Sri Lanka (CBSL) received USD 1.1 billion from the Reserve Bank of India (RBI), under the currency swap agreement between the two reserve banks. The signing of the special currency swap agreement for USD 1.1 billion by the CBSL with the RBI took place earlier on 17 July 2015.
Sri Lanka already obtained USD 400 million under this arrangement, which is available from the RBI to SAARC member countries, to increase foreign reserves. CBSL Governor Arjuna Mahendran said, the country will receive the balance 1.1 billion dollars from the Reserve Bank of India to boost foreign reserves under a USD 1.5 billion dollar swap arrangement. The funds will reach Sri Lanka overnight.
In a press release the CBSL further added, the realisation of the remaining proceeds of the currency swap arrangement with the RBI amounting of USD 1.1 billion and long term financial flows to the government, including the planned term loan of USD 500 million, will support its official reserves.
Significance:
With the enhanced level of official reserves, the CBSL expects that the exchange rate would stabilize in line with sound macroeconomic fundamentals and movements of other currencies of major trading partners.
Important Points to Remember:
- Capital of Sri lanka – Colombo
- Sri Lankan Currency – Sri Lankan rupee
- President of Sri Lanka – Maithripala Sirisena
- Prime minister of Sri Lanka – Ranil Wickremesinghe
- SAARC stands for – South Asian Association for Regional Cooperation
- SAARC Headquarters located in – Kathmandu, Nepal
- SAARC Secretary General – Arjun Bahadur Thapa
- SAARC Membership – 8 Members (Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka)