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China approves US$1.5bn dollar swap for Sri Lanka: Minister Cabraal

ECONOMYNEXT – The People’s Bank of China has confirmed that a 1.5 billion dollar equivalent swap arrangement had been approved, State Minister for Capital Markets and Money, Nivard Cabraal said.

He said Sri Lanka could draw down the swap at any time but it will be kept as a buffer.

“We will draw down as and when we need,” he said. “But our main focus is to increase non-debt inflows.”

He said the thrust on improving non-debt inflows will be maintained.

Cabraal has proposed a plan to boost inflows made up of exports, foreign direct investment of up to 34 billion US dollars and contain outflows to 27.6 billion US dollars leaving 4.4 billion for debt service.

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He said at the time that the People’s Bank of China swap would kept as a buffer and would not draw down on it immediately. There is usually a swap cost when a facility is drawn down.

The RMB swap could be drawn down and used to make payments, such imports from China for example in place of dollars. China is the top source of imports for Sri Lanka. (Colombo/Mar10/2021)

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