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Sri Lanka signs US$1.1bn currency swap with India

ECONOMYNEXT – Sri Lanka’s central bank said it had signed a 1.1 billion US dollar currency swap with the Reserve Bank of India, as part of a total package of 1.5 billion US dollars.

The first tranche of 400 million dollars has already been drawn down.

"This new facility will allow the Central Bank to further strengthen its position in the financial market and bring greater stability to the exchange rate," the Central Banks said in a statement.

 "This facility will further enhance the economic cooperation between the two institutions and strengthen the long standing relationship between two countries."

Sri Lanka’s rupee has come under pressure from rising state domestic borrowings and spending on salaries and subsidies, compounded by ultra-low interest rates and central bank liquidity releases into money markets. (Colombo July17/2015)