India, Sri Lanka central banks sign $700 mln currency swap agreement
Posted by Editor on March 30, 2016 - 5:44 am
India’s central bank said on Tuesday it would allow its Sri Lankan counterpart to draw up to $700 million over a maximum period of three months under a new special currency swap agreement signed by the two central banks.
The Reserve Bank of India has previously provided currency swaps to the Central Bank of Sri Lanka, including plans to extend a $1.5 billion agreement by one year.
Sri Lanka is seeking a loan of $1.5 billion from the International Monetary Fund (IMF) to boost foreign exchange reserves and help avert a balance of payments crisis.
The country has seen its foreign exchange reserves depleted by the central bank’s defence of its rupee currency, as it struggles with heavy debt piled up under the previous government.
(Reuters)
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The R Government created all this infrastructure in the South which produce no economic return. They borrowed heavily on high interest rates and part of the borrowings grew legs and reached personal bank accounts in Dubai.
The Hon PM and Arjuna Mahendran are facing challenges on a day-to-day basis. The LKR is plunging, the only demand coming from the tourist industry) while the demand for goods and services by an emerging middle class, is surging.
The R Government had nil economic strategy; they borrowed to build white elephants while scalping commissions; they neglected the export industries by not having any initiative to sustain long term development.
In post-war, Defence expenditure grew.
The Rajapaksa clan and its immediate layer of parasites were partying, earning free money, enjoying the best of perks and making their wealth grow, exponentially.
I am not confident Yahapalana leaders are snow-white lilies either.
The feeling I have is almost similar to the feeling which I had in the latter years of the Sirmavo Govt in the ’70s. It is what is called, I believe, despondency.
In the 60’s to be precise the Sirimavo government was bad even though the Plantations were thriving even then FE was hard to come by. In 64 i spent a vacation in SL and on my return journey the Central Bank authorised #3.10 as travel expenses. She was no economic expert but then she was advised by NM and he knew what he was talking about and the importance of conservation of FE.
Another plus point was banning of paddy between districts which helped to stabilise paddy prices and austerity measures saw the increase of agricultural production. Had those policies been followed things would have been a damn sight better than what it is today.
Ravi is cluless about foreign exchange control and i bet before the year is out lankans will pay 200 rs to the dollar and inflation will be comparable to what happens in places like greece.