Bangladesh Approves Currency Swap Facility to Sri Lanka

31 May 2021 Current Affairs:Bangladesh’s central bank has approved a $200 million currency swap facility for Sri Lanka, which will assist the country in dealing with its foreign exchange crisis.

Highlights: 
♦ A currency swap is essentially a loan given by Bangladesh to Sri Lanka in dollars with the agreement that the debt will be repaid in Sri Lankan rupees with interest.
♦ This is less expensive than borrowing on the market for Sri Lanka.
♦ The duration of the currency swap will be specified in the agreement. 
♦ This may be Bangladesh’s first time extending a helping hand to another country. 
♦ This is also the first time Sri Lanka has borrowed from a SAARC country other than India.
 

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