Lanka pays back 75pc of $200m loan to Dhaka
Staff Reporter :
Sri Lanka has paid another $100 million in the second installment out of $200 million loan it took from Bangladesh in a currency swap agreement two years ago, a top official of Bangladesh Bank said yesterday.
Last month Colombo paid $50 million in the first installment of the loan repayment referring the island nation, which went bankrupt last year repaid 75 per cent of a $200 million loan from Bangladesh.
“Sri Lanka has paid back $100 million to us on Thursday (31 August).
Now they are expected to return the remaining $50 million in due course,” the Bangladesh Bank Spokesperson and Executive Director Majbaul Haque said on Friday.
Earlier in August 2021, Bangladesh provided a $200 million loan from its foreign exchange reserves to the island nation to help it meet its foreign exchange crisis – the first loan given by Bangladesh to any country.
As per the agreement, Sri Lanka committed to repay the loan with an interest rate of 1.5 per cent plus the current LIBOR rate of 5.42 per cent.
The loan was supposed to be repaid in three installments within nine months, but the time was extended three times by about 27 months as the country could pay back the money.
Sri Lank which announced its first-ever sovereign default in April 2022 has negotiated with the International Monetary Fund (IMF) for a bailout of $2.9 billion.
The island nation faced its worst economic crisis in history due to a shortage of foreign exchange reserves.
Referring the current macro-economic status, Sri Lanka recently said its inflation has dropped to 6.3 percent, a single-digit figure for the first time in two years.
The last time single-digit inflation was recorded 5.8 per cent in September 2021.
The highest inflation since the island nation’s economy came under its worst crisis was 69.8 per cent in September last year.
Besides, Sri Lanka’s foreign exchange reserves have risen in part due to rising dollar receipts from tourism and remittances.
These increased inflows, together with an IMF bailout and progress on debt restructuring, are stoking hopes of a turnaround for the nation.
At the end of last year, the country’s total foreign exchange reserves were $1.9 billion and they almost doubled to $3.7 billion at the end of June this year.
