Approval for Proposal for Extension of the value date of the Existing Currency Swap facility of USD 1.1 billion availed by Central Bank of Sri Lanka (CBSL) and provision of a new special currency swap to Sri Lanka for USD 700 million

The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi has given its ex-post facto approval to the proposal for extension of the value date to 8th March 2016 of the Existing Currency Swap facility of USD 1.1 billion availed by Central Bank of Sri Lanka (CBSL) from Reserve Bank of India (which was due to be repaid on 3rd March 2016).

Approval of this proposal will provide a temporary relief to Sri Lanka till alternative arrangement is in place.

The Union Cabinet also gave its approval for providing a special swap of USD 700 million to Sri Lanka for a period of 3 months or till the time Sri Lanka avails the IMF facility whichever is earlier.

Approval of this proposal shall help Sri Lanka in strengthening its economic stability and official reserves which have witnessed downward trend in 2015 owing to the adverse impact of the expected interest rate hikes in the United States. This will further foster India’s bilateral relations and economic ties with Sri Lanka, which is India’s important partner in SAARC and South Asia.