Lanka gets 6 more months to repay BB’s $200m

Bangladesh Bank yesterday granted Sri Lanka's request to be given six more months to repay a $200 million loan due to the prolonging of its economic crisis. 

A senior official of the central bank, on condition of anonymity, said its board of directors had granted the extension.

The island nation, which has been facing an acute shortage of greenbacks for months, borrowed the money in May 2021.

The country was scheduled to repay the loans by April last year but failed to do so.

In April last year, Sri Lanka announced defaulting on its entire $51 billion of external debt.

As per a subsequent agreement, Sri Lanka was supposed to repay the $200 million by March this year.

Continuing to face an acute shortage of foreign exchange reserves, the nation was compelled to request the BB to extend the repayment period.

As per the new deadline, Sri Lanka will have to repay the loan by September this year.

The BB has extended the deadline at a time when its foreign exchange reserves are depleting at a faster pace.

Bangladesh has already sought credit support from several multilateral lenders, including International Monetary Fund.

The reserves of Bangladesh stood at $32.52 billion on January 11 in contrast to $44.92 billion on the same day a year ago, according to data from the central bank.