Bangla joins China, S Korea in bailing out Sri Lanka
Published on: Thursday, May 27, 2021
By: AFP
Sri Lanka last month said its economy shrank 3.6pc last year due to the Covid-19 pandemic. (APpic)
DHAKA: Bangladesh has joined China and South Korea by approving a currency swap to bail out Sri Lanka, which is facing its worst foreign exchange crisis, officials said Wednesday.The central bank of Bangladesh on Tuesday approved a $250 million deal, its first currency swap, after Sri Lanka appealed for help to shore up its foreign reserves and ease pressure on the exchange rate.
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“The board of the Bangladesh Bank has decided in principle to lend $200-250 million from Bangladesh’s reserves to Sri Lanka for three months,” Mohammad Sirajul Islam, a spokesman for the country’s central bank, told AFP.
Bangladesh has built up $45 billion in reserves in recent years on the back of impressive garment exports and record remittances by its 10 million overseas workers.
But Sri Lanka’s GDP per capita of $3,852 is more than double that of Bangladesh, according to the latest World Bank data.
“The fact that Bangladesh is the one providing the dollars is a big ego booster,” Ahsan H. Mansur, a former senior IMF official and current executive director of the Dhaka-based Policy Research Institute, told a local daily.
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Two weeks ago, Sri Lanka secured a $500 million loan from South Korea, a month after a similar loan from China was issued, as the island battles a dollar shortage and debt crisis.Stay up-to-date by following Daily Express’s Telegram channel.
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At the end of April Sri Lanka said its economy shrank 3.6 percent last year due to the Covid-19 pandemic, making it the worst downturn since independence from Britain in 1948.
