Bangladesh grants Sri Lanka another year to repay $200 mn loan

Bangladesh Bank today granted Sri Lanka another year to repay the USD 200 million loan to give the Island nation a respite so that it can overcome its worst ever debt and economic crises.

Sri Lanka will have to repay interest on the loan given by Bangladesh every three months, said a top official after the decision of the central bank board.

The development comes a couple of weeks after the Sri Lankan government requested more time to return the USD 200 million it took in exchange for an equivalent amount of Sri Lankan rupees in August last year.

As per the currency swap agreement, the amount was due this month.

On April 13, Sri Lanka announced defaulting on its entire USD 51 billion of external debt until a bailout from the International Monetary Fund comes through.

Given the acute foreign exchange scarcity that the island nation of 22 million is facing -- which has left the government unable to import basics including food and medicine -- the Bangladesh Bank has decided to agree to the deferral.