Sri Lanka seeks another loan of USD $250 million from Bangladesh as forex crisis worsens

by Biranavan
Mar 30, 2022

Photo of Bangladesh’s Foreign Minister, AK Abdul Momen

Sri Lanka has requested a USD $250 million currency swap with the Bangladesh Bank. 

The announcement came from Bangladesh Foreign Minister  A. K. Abdul Momen. The minister said that the island nation has requested another US$ 250 million currency swap. The Foreign minister is currently in Sri Lanka to attend the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) which got underway in Colombo today.

A currency swap is effectively a loan that Bangladesh will give to Sri Lanka in US dollars, with an agreement that the debt will be repaid with interest in Sri Lankan rupees. 

Sri Lanka has previously received a loan from Bangladesh last year in three tranches. The Bangladesh Bank released USD $ 50 million as the first tranche under a currency swap deal to support poorly-rated Sri Lanka on August 19, 2021.

The second tranche amounting to USD $100 million was released on August 30, 2021, and the final instalment worth USD $50 million was released on September 21, 2021.

Bangladesh has been a staunch supporter of Sri Lanka in recent years, Last year addressing a virtual press conference, Bangladesh’s Foreign Minister, AK Abdul Momen, defended their vote against the UN Human Rights Council resolution by claiming that it was “politically motivated” and stating that “Sri Lanka has done its own investigation”.

This recent request for a loan comes following the Rajapaksa regime's attempt to secure loans from both China and India totalling USD $4 billion in recent weeks. 

Read more at NewsWire

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