{"id":118465,"date":"2021-09-22T16:28:40","date_gmt":"2021-09-22T23:28:40","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=118465"},"modified":"2021-09-22T16:28:40","modified_gmt":"2021-09-22T23:28:40","slug":"bangladesh-completes-200m-bailout-fund-disbursement-to-sri-lanka","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2021\/09\/22\/bangladesh-completes-200m-bailout-fund-disbursement-to-sri-lanka\/","title":{"rendered":"Bangladesh completes $200m bailout fund disbursement to Sri Lanka"},"content":{"rendered":"

Source: New age bd<\/strong><\/em><\/span><\/h2>\n\n\n

\u00a0The Bangladesh Bank on Tuesday completed disbursement of the $200-million bailout fund to cash crisis-hit Sri Lanka amid a deepening foreign reserve crisis in the country.<\/p>\n\n\n\n

The\ndisbursement was fully executed to the island nation at a time when the country\nannounced a state of emergency over food shortage, instigating Sri Lankan\ncentral bank governor Weligamage Don Lakshman to step down over his failure to\nresolve the forex reserve crisis.<\/p>\n\n\n\n

\u2018The\ncentral bank on Monday released the last tranche of the $200-million loan and\nit was supposed to be released by the Federal Reserve Bank of New York by\nTuesday,\u2019 a senior BB official told New Age on Tuesday.<\/p>\n\n\n\n

The\nthird tranche was worth $50 million.<\/p>\n\n\n\n

On\nAugust 19 in 2021, the BB released $50 million as the first tranche under a\ncurrency swap deal to support the poorly-rated Sri Lanka and another $100\nmillion as a second instalment on August 30 in 2021.<\/p>\n\n\n\n

The\ninitial tenure of the currency swap agreement was fixed at three months while\nthe agreement contained a rollover condition, allowing Sri Lanka to extend the\nperiod of repayment of the financing facility.<\/p>\n\n\n\n

Sri\nLanka may utilise the fund for around one year and then return back the money\nalong with interest, the BB official said.<\/p>\n\n\n\n

The\nCentral Bank of Sri Lanka, in a statement, stated that there was a possibility\nof extending the facility twice.<\/p>\n\n\n\n

The\nimpact of the Covid outbreak has been devastating on the island nation\u2019s\neconomy which contracted by 3.4 per cent in 2020.<\/p>\n\n\n\n

Tourism,\na major source of Sri Lanka\u2019s foreign currency, has been the worst affected\nsector as the Covid situation is yet to come under control.<\/p>\n\n\n\n

Economic\ncrisis coupled with a poor reserve amounting to less than two months\u2019 import\npayments also prompted credit rating agencies to downgrade the country\u2019s rating\nand to question whether Sri Lanka would be able to service the $1.5 billion\nline of debt that matures in 2022.<\/p>\n\n\n\n

The\ncurrency swap initiative was taken after Sri Lankan prime minister Mahinda\nRajapaksa\u2019s visit to Bangladesh to join the celebrations of the golden jubilee\nof Bangladesh\u2019s independence and received the BB approval in May.<\/p>\n\n\n\n

Apart\nfrom receiving $200 million from Bangladesh, the island nation also received\nanother $787 million from the International Monetary Fund\u2019s special drawing\nrights (SDR) allocation.<\/p>\n\n\n\n

Apart\nfrom the fresh phase of the crisis, Sri Lanka has had no default events (on\nbonds or loans) since 1983.<\/p>\n\n\n\n

On\nthe other hand, Bangladesh\u2019s reserve has been growing rapidly after the Covid\noutbreak whereas Sri Lanka\u2019s reserve has come under increasing pressure.<\/p>\n\n\n\n

Foreign\ntourists were staying away after deadly suicide bombings took place in Sri\nLanka on Easter Day in 2019, killing more than 250 people. But efforts to revive\nthe industry failed after the pandemic struck.<\/p>\n\n\n\n

On\nTuesday, Bangladesh\u2019s foreign exchange reserve stood at $46.3 billion after\nhitting a record high of $48 billion from around $33 billion one and a half\nyear ago.<\/p>\n\n\n\n

On\nthe other hand, the reserve of Sri Lanka, which is facing a sharp trade\ndeficit, declined to around $3 billion by the end of August 2021.<\/p>\n\n\n\n

()<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Source: New age bd \u00a0The Bangladesh Bank on Tuesday completed disbursement of the $200-million bailout fund to cash crisis-hit Sri Lanka amid a deepening foreign reserve crisis in the country. The disbursement was fully executed to the island nation at a time when the country announced a state of emergency over food shortage, instigating Sri […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-118465","post","type-post","status-publish","format-standard","hentry","category-politics"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/118465","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=118465"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/118465\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=118465"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=118465"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=118465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}