The Bangladesh Bank board has approved in principle a draft US$ 200 million currency swap deal with Sri Lanka. The currency swap agreement would be finalised after getting a legal vetting approved by the Government, BB officials told New Age after the meeting.
BB governor Fazle Kabir chaired the meeting at its headquarters in Dhaka.
Under the draft currency swap proposal, the BB would provide up to US$ 200 million in foreign currency to meet Sri Lanka’s foreign currency expenditures, the officials said.
Against the fund, Sri Lankan would keep a same amount of its local currency, Rupee, with the Bangladesh Bank along with a Government guarantee. The BB would get around 1-2 per cent plus LIBOR from Sri Lanka as interest.
The currency swap agreement also contains a rollover condition, allowing Sri Lanka to extend the period of repayment of the loan, the BB officials said.
The currency swap initiative was taken after Sri Lankan Prime Minister Mahinda Rajapaksa’s visit to Bangladesh to join the celebrations of the Golden Jubilee of Bangladesh’s Independence.