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Sri Lanka to get another USD 500 million loan from China

In the wake of plummeting forex reserves to a new low since 2008/2009, Sri Lanka has signed an agreement to obtain another USD 500 million loan from the China Development Bank (CDB), treasury officials said.
The USD 500 million would be disbursed in April itself. The loan will have a repayment period of 10 years.
"A previous USD 500 million loan from CDB was for 8 years.The loans would be on favourable terms," they added.

The USD 1.2 billion loan facility has been negotiated with the CDB as Sri Lanka’s forex reserves dropped to USD 4.05 billion dollars in March 2020, the lowest since a currency crisis in 2008/2009.

The April tranche is the second USD 500 million of a USD 1.2 billion dollar facility Sri Lanka has been seeking from the CDB.

 A USD 200 million equivalent Renminbi facility is also expected.

Sri Lanka has about USD 3.5 billion of foreign currency denominated debt to repay from March to December 2021, and the balance is owned by resident holders, officials said.

Sri Lanka began the year with about USD 6.8 billion of forex denominated debt due in 2021 of which about USD 2.5 billion were domestically owned, they added.

These include Sri Lanka Development Bonds and loans taken from the foreign currency banking units of domestic banks, they claimed.

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