Sri Lanka has repaid its lender, Bangladesh, the entire $200 million loan taken through a currency-exchange agreement called SWAP more than two years ago.
Amazingly, the island nation, which had been in dire financial and economic straits even months ago, also paid total interest amounting to over $25.537 million.
"Sri Lanka has paid its third and final instalment amounting to $51.044 million (principal plus interest) on Thursday night," said a central banker of Bangladesh.
However, getting back the loan amount had become uncertain at a time when the island country had declared itself sovereign debt defaulter.
Sri Lanka sought extension several times to repay the amount to Bangladesh Bank.
As the Lankan economy has started to turn around this year, it has been quick in its capacity to repay foreign debt.
According to the Bangladesh Bank (BB), Sri Lanka initially repaid $50 million on August 20.
Then on August 31, it paid $100 million.
Finally, Colombo returned the remaining $50 million along with interest on Thursday night.
The completion of this repayment was confirmed by BB spokesperson and executive director Md Mezbaul Haque.
As the currency swap deal was agreed in 2021, Sri Lanka was supposed to repay the amount within three months.
Bangladesh lent the money to Sri Lanka in three instalments in 2021 with the first tranche of $50 million sent on August 19.
On the other hand, the second instalment of $100 million was sent 11 days later and the remaining $50 million in September.
So, Sri Lanka was supposed to repay the amount by the end of 2021 with an interest rate of LIBOR plus 2.0 per cent.
In May 2022, Bangladesh extended the term to repay to September 2023 and the interest rate was revised upward to LIBOR plus 2.5 per cent.
The Central Bank of Sri Lanka has paid the interest amount with every instalment.
When Bangladesh extended the loan, its forex reserve was in comfort zone, which now stands at $21.45 billion.
© 2024 - All Rights with The Financial Express
