Business
Business
FILE PHOTO: A participant stands near a logo of World Bank at the International Monetary Fund – World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS/Johannes P. Christo
COLOMBO : The International Finance Corporation (IFC), the World Bank’s investment arm, said it will provide Sri Lanka a $400 million cross-currency swap facility to help fund essential imports.
Three private banks, which together deal with over 30 per cent of Sri Lanka’s remittances and exports, will receive the facility to fund essential imports, including medicine, food and fertiliser, the IFC said in a statement on Monday.
The funds will provide a much needed foreign exchange cushion for Sri Lanka, which is grappling with its worst financial crisis in over seven decades partly triggered by a severe shortage of dollars.
The island nation’s economy is estimated to have contracted by 9.2 per cent in 2022 and is expected to shrink a further 4.2 per cent in 2023, according to World Bank data.
“We expect this financing to boost confidence in the investor community, attract fresh capital inflows to support the Sri Lankan economy,” said Joon Young Park, IFC’s Portfolio Manager, Financial Institutions Group for South Asia.
IFC is also working on further plans to support client banks with other long-term funding and advisory services in the future, the statement added.
Sri Lanka signed a preliminary agreement with the International Monetary Fund (IMF) for a $2.9 billion bailout last September but has to put its debt on a sustainable repayment track before the funds can be disbursed.
(This story has been corrected to fix description of three banks in paragraph 2)
Be among the first to know the Breaking news
This service is not intended for persons residing in the E.U. By clicking subscribe, I agree to receive news updates and promotional material from Mediacorp and Mediacorp's partners.
Copyright© Mediacorp 2023. Mediacorp Pte Ltd. All rights reserved.
We know it’s a hassle to switch browsers but we want your experience with CNA to be fast, secure and the best it can possibly be.
To continue, upgrade to a supported browser or, for the finest experience, download the mobile app.
Upgraded but still having issues? Contact us