The Union Cabinet today gave its ex-post facto approval to the proposal for extension of the value date to 8th March 2016 of the existing currency swap facility of $ 1.1 billion availed by Central Bank of Sri Lanka (CBSL) from Reserve Bank of India (RBI), which was due to be repaid on March 3 this year.
The decision will provide a temporary relief to Sri Lanka till an alternative arrangement is in place, an official press release said here.
The Cabinet also gave its approval for providing a special swap of $ 700 million to Sri Lanka for a period of three months or till the time Sri Lanka avails the International Monetary Fund (IMF) facility, whichever is earlier.
“Approval of this proposal shall help Sri Lanka in strengthening its economic stability and official reserves which have witnessed downward trend in 2015 owing to the adverse impact of the expected interest rate hikes in the United States. This will further foster India’s bilateral relations and economic ties with Sri Lanka, which is India’s important partner in SAARC and South Asia,” the release added.