Sri Lanka is in negotiations with China regarding a currency swap, according to the Daily Mirror.
A Chinese embassy representative said that the People's Bank of China (PBOC) and the Central Bank of Sri Lanka (CBSL) would have a “negotiated amount” and “concrete developments” by the end of this month.
Earlier this month, Sri Lanka’s state-owned Bank of Ceylon (BOC) established a long-term credit facility with China Development Bank (CDC), for USD $140 million - despite Sri Lanka’s worsening economic crisis. The CBSL is also expected to sign a US $1.1 billion currency swap deal with the Reserve Bank of India, this week.
In 2014 – when current Sri Lanka's Prime Minister, Mahinda Rajapaksa was president - there was an agreement between PBOC and CBSL for a $1.63 billion currency swap deal which aimed to “promote bilateral trade and strengthen financial cooperation between the two central banks.”
In 2018, the Hindu reported that Sri Lanka’s debt’s to China amassed over USD $5 billion. Despite Sri Lanka’s financial troubles worsening because of the coronavirus pandemic, they have persisted with turning to China for monetary assistance.
In May this year, China’s president, Xi Jinping called Sri Lankan president, Gotabaya Rajapaksa and insisted, “the strategic cooperative partnership between China and Sri Lanka is based on sincere mutual assistance and ever-lasting friendship” and “will grow stronger through the joint effort to contain COVID-19 pandemic.” China followed this by sanctioning the USD $140 million loan to Sri Lanka earlier this month, stating the loan, “will be utilised for supplementing Bank of Ceylon’s general lending requirements, which will provide much needed support for businesses affected by COVID-19”.
The currency swap agreement said to “further promote association between financial institutions of both countries” comes as China continues to extend its influence on Sri Lanka and further the country's crippling debt.
Read more here.
We need your support
Sri Lanka is one of the most dangerous places in the world to be a journalist. Tamil journalists are particularly at threat, with at least 41 media workers known to have been killed by the Sri Lankan state or its paramilitaries during and after the armed conflict.
Despite the risks, our team on the ground remain committed to providing detailed and accurate reporting of developments in the Tamil homeland, across the island and around the world, as well as providing expert analysis and insight from the Tamil point of view
We need your support in keeping our journalism going. Support our work today.
For more ways to donate visit https://donate.tamilguardian.com.
