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Foreign reserves crisis: CBSL looks for financial assistance in the Middle East

12 Dec 2021

  • Cabraal to join senior CBSL delegation for negotiations
  • SL has sought a $ 1 billion swap facility from Qatar CB
By Asiri Fernando A high-level delegation from the Central Bank of Sri Lanka (CBSL) left for an official visit to Qatar and several other Middle Eastern countries yesterday (11), The Sunday Morning reliably learnt. The delegation is expected to explore options for financial assistance and possible swap arrangements with the countries in the Middle East. The visit comes following a guarantee by Finance Minister Basil Rajapaksa to Parliament last week that Sri Lanka would honour her debt obligation due next year. A $ 500 million debt repayment is due in January 2022, and a further $ 1 billion later that year.  Minister Rajapaksa vowed to service debt without seeking assistance from the International Monetary Fund (IMF). A senior government source told The Sunday Morning that the three-member delegation will include a CBSL Deputy Governor and an Assistant Governor, and that it was likely to visit the Kingdom of Saudi Arabia as well as the UAE. Sources close to the CBSL also said that Governor Ajith Nivard Cabraal would join the officials in the Middle East in order to lead talks. The Government’s push to secure financial assistance from other sources comes as the anticipated assistance from India is delayed. The Government told Parliament last week that Sri Lanka’s net foreign assets were worth $ 1.507 billion as of November this year, and that a $ 1 billion swap facility with the Qatar Central Bank (CB) had been sought.  The foreign currency shortage in the country continues to worsen as the CBSL announced a crackdown on unofficial channels used to send remittances to Sri Lanka, following a drop in remittances sent via banks in November reaching an estimated $ 300 million. Earlier this year, the Energy Ministry announced that Sri Lanka was also seeking a $ 3.6 billion line of credit from Oman to purchase fuel. However, the facility failed to materialise.


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