TIL Desk/Business/Colombo/ Sri Lanka’s Central Bank on Wednesday said that the Reserve Bank of India (RBI) has agreed to provide USD 400 million under a swap arrangement to boost the island nation’s reserves.
“The RBI’s very rapid and timely assistance will serve to boost investor confidence by supporting Sri Lanka to maintain adequate level of external reserves while accommodating outflow related to imports, debt servicing and if necessary support for the currency to avoid disorderly adjustment,” it said in a statement.
It said that a further request to the RBI for another SWAP arrangement of USD 1 billion is “under consideration”. These are to be made available under the SAARC SWAP facility. The RBI has agreed to provide the funds under its SAARC (South Asian Association for Regional Cooperation) Swap Facility, the Central Bank said.
Analysts said the RBI’s assistance would be much appreciated by Sri Lanka given that the island is still recovering from the political and constitutional crisis in October and November which had an adverse impact on the economy with poor investor sentiment and foreign outflows of capital.
