Sri Lanka has reached the closing stages of negotiations for a US $ 200 million currency swap arrangement with China Development Bank, according to Central Bank Governor Dr. Indrajit Coomaraswamy.
The two parties have reached an agreement, but are yet to sign papers as the contract is with the Attorney General’s Department, seeking legal clearance.
At the beginning of the year, Sri Lanka sought a currency swap with the People’s Bank of China (PBC), China’s Central Bank to draw up to US $ 1.0 billion to ease foreign exchange pressures and support its external reserves, but did not materialize.
In September 2014, the two Central Banks entered in to 3–year swap arrangement enabling Sri Lanka to draw 10 billion Yuan – equivalent to about US $ 1.5 billion in exchange for Rs.225 billion.
By end of October 2016, Sri Lanka’s gross official reserves had fallen to US $ 6.1 billion. In addition to the swap arrangement with China, the government also expects another US $ 1.1 billion from the sale of the Hambantota port, another US $ 100 million from the World Bank for budgetary support and further funding support from Japan International Cooperation Agency (JICA) during 2017.