The Reserve Bank of India (RBI) has signed an agreement for extending a $400-million currency swap facility to Sri Lanka to boost the foreign reserves and ensure financial stability of the country, which is badly hit by the COVID-19 pandemic.
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The currency swap arrangement will remain available till November 2022.
The agreement between Sri Lanka and RBI has been signed under the South Asian Association for Regional Cooperation (SAARC) framework. The RBI also offers similar swap lines to central banks in the SAARC region within a total corpus of $2 billion. This facility originally came into operation in 2012.
India already has a $75 billion bilateral currency swap line with Japan, which has the second highest dollar reserves after China.
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