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Swap request with Bangladesh makes SL look vulnerable: Hashim

24 Mar 2021

  • MP claims SL used to be better than Bangladesh  

By Alma Rizvi   Referring to the recent discussion held between the Premiers of both Sri Lanka and Bangladesh on co-operating closely for swaps soon after a swap arrangement was reached with China, MP Kabir Hashim yesterday (23) claimed that back-to-back swaps will make the country look vulnerable.  During a parliamentary session, Hashim questioned whether Sri Lanka’s discussion with Bangladesh for swaps was due to China’s inability to extend financial support to the island.  “Sri Lanka used to perform economically better than Bangladesh back in the day. We were importing only sacks from them. Are we now in such a vulnerable stage that we need to go and request a swap from them?” Hashim questioned.  Sri Lanka struck a 10 billion yuan ($ 1.5 billion dollars) swap deal with the People’s Bank of China, will be additionally requesting for a $ 1 billion greenback swap from India, and is currently having discussions with Pakistan with regard to cross-investing foreign exchange reserves in authorities’ bonds. In February, a $ 400 million swap was repaid to the Reserve Bank of India, pending a programme with the International Monetary Fund (IMF). State Minister of Money and Capital Market and State Enterprise Reforms Ajith Nivard Cabraal recently stated that the Bangladesh Central Bank used to have Sri Lankan sovereign bonds in its portfolio.   The Bangladeshi Central Bank provides liquidity to the banking system. It maintained monetary stability and credibility for over 10 years and its foreign reserves rose from $ 32.8 billion in February 2019 to $ 43.8 billion in February 2021. The progress of the country was dependent on it transitioning to a home for export energy whilst leveraging on low wages and investable capital. However, Bangladesh has a low income-to-gross home product ratio, limiting the flexibility of rulers to miss-spend cash and making certain that those that earn, and are certified to put money into a space that gives them the perfect return, are free to take action and enhance progress.


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