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Foreign reserve crisis: $ 400 m Indian swap expected in Jan.

26 Dec 2021

- $ 1.5 b from China; Indian swap, $ 500 m credit line to boost reserves - SL to receive Chinese facility and Indian swap by 10 Jan. 2022 By Our Political Editor The $ 400 million swap facility with India that has been in the pipeline for several months is expected to be received by the Sri Lankan Government during the second week of January 2022, The Sunday Morning learnt.  It is learnt that the long awaited facility would be received by Sri Lanka around 10 January 2022. The facility has been negotiated between officials from Sri Lanka and India since September this year.  Meanwhile, the Government is to receive $ 1.5 billion from China, and the facility is expected to reach state coffers this week, it is learnt.  A highly placed Government source told The Sunday Morning that the $ 1.5 billion facility from China would definitely reach Sri Lanka by the first week of January 2022 since it is now in the final documentation stage after finalising all necessary approvals from both sides. “We will receive $ 1.5 billion from China and then the $ 400 million swap with India by 10 January 2022. The $ 500 million line of credit from India for fuel will also come in January 2022,” the source explained, adding that the Government of Sri Lanka (GoSL) and India were looking at expediting the $ 1 billion facility/credit line requested by Finance Minister Basil Rajapaksa during his recent visit to India.  “The Government will not default on its payments due in January 2022 and the foreign reserves situation will see positive improvements by next month (January),” the source further noted.  However, it is also learnt that the Indian Government is waiting for a positive signal from the Sri Lankan Government on the progress of Indian-funded projects in the island that are still in the pipeline.  Central Bank of Sri Lanka (CBSL) Governor Ajith Nivard Cabraal has expressed confidence in the country’s foreign reserves closing this year at $ 3 billion, and dispelling fears of a further depletion in the current reserves of $ 1.5 billion. However, Cabraal has remained tight-lipped on the source of the expected foreign inflows.


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