Central Banking

CBSL inks deal with RBI to boost reserves

Swaps deal will help maintain reserves while talks with the IMF resume, central bank says

Central Bank of Sri Lanka
The Central Bank of Sri Lanka
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The Central Bank of Sri Lanka has inked a deal with the Reserve Bank of India for a swap line worth $400 million.

The deal will help to “boost investor confidence” in Sri Lanka, the CBSL said in a statement, while helping maintain sufficient reserves to cover outflows due to imports, debt repayments and currency interventions where required.

The CBSL’s official reserves were worth around $7 billion on November 30, according to the latest data published by the central bank. The figure has declined from close to $8 billion since the start of 2017.

Sri Lanka is just emerging from a political crisis that halted discussions on the latest round of support from the International Monetary Fund. The Sri Lankan finance minister is due to visit the IMF in Washington, DC, on January 14 to resume talks.

The CBSL thanked its Indian counterpart for its “very rapid and timely assistance”. It said a further swap arrangement of up to $1 billion was under consideration.

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