Sri Lanka pays back another USD 100mn to Bangladesh

Sri Lanka has repaid USD 100 million more to Bangladesh, which had lent USD 200 million to the crisis-hit island nation two years ago.

Confirming this development on Friday, Bangladesh Bank Executive Director and spokesperson Mezbaul Haque told the media that Bangladesh received USD 2.8 million more in interest with the second installment.

Sri Lanka reimbursed USD 50 million to Bangladesh in the first installment of the loan on August 17.

Mezbaul earlier said the central bank was optimistic that Sri Lanka would honor its commitment to repay the entire loan amount within the current year.

Back in 2021, the Bangladesh Bank provided a USD 200 million loan to Sri Lanka, which was then grappling with financial challenges.

This assistance was drawn from the foreign exchange reserves under a currency swap arrangement. The loan had an initial term of one year, which concluded in September of the following year.

Due to Sri Lanka’s persisting economic turmoil, the nation requested extensions for the repayment period. Bangladesh accommodated this request, granting two phases of extensions – first, an additional six months until March of this year, and later another six-month extension until September.

Source: The Business Post