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RBI agrees USD 1.5 billion currency swap agreement with Sri Lankan central bank

RBI agrees USD 1.5 billion currency swap agreement with Sri Lankan central bank

Colombo: With the Sri Lankan central bank, Reserve Bank of India agreed for a USD 1.5 billion currency swap agreement to help the island nation keep its currency stable, Prime Minister Narendra Modi said on Friday.

The deal was announced after a meeting between Modi and Sri Lankan President Maithripala Sirisena here.

Modi reached here early this morning on the last leg of his three-nation tour that included Seychelles and Mauritius. The currency swap pact assumes significance as the Sri Lankan rupee has been under pressure for quite some time. Despite attempts made by the central bank, the currency has been losing value since the beginning of this year.

He said, “The Reserve Bank of India and the Central Bank of Sri Lanka have agreed to enter into a Currency Swap Agreement of USD 1.5 billion. This will help keep the Sri Lankan rupee stable.” At the current valuation, one Indian rupee is equivalent to 2.12 Sri Lankan Rupee. It has lost almost three percent value in comparison to the Indian rupee so far in 2015.

He is the first Indian Prime Minister to come to Sri Lanka on a standalone bilateral visit since 1987. Last month, Sirisena visited India on his first foreign trip as Sri Lankan President.