Sri Lanka, India in US$1.5bn currency swap deal

COLOMBO (EconomyNext) – The Indian and Sri Lankan central banks have agreed on a 1.5 billion US dollar currency swap agreement that will help to stabilise the Sri Lankan rupee, Indian Prime Minister Narendra Modi said.

He announced the deal soon after talks with Sri Lankan President Maithripala Sirisena during a two-visit to the island that began Friday.

"The Reserve Bank of India and the Central Bank of Sri Lanka have agreed to enter into a Currency Swap Agreement of 1.5 billion dollars," Modi said.

"This will help keep the Sri Lankan rupee stable."

The Sri Lankan rupee has weakened about 1.4 percent this year and currently is being at around 132.90 rupees to the US dollar.

Currency dealers say downward pressure on the rupee could ease as domestic interest rates rise.