Sri Lanka repays $50m in first instalment of Bangladesh loan

Central bank officials say Sri Lanka is expected to pay another instalment in August

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Sri Lanka has started to repay $200 million it borrowed from Bangladesh under a currency swap deal two years ago, with $50 million in the first instalment.

Bangladesh Bank spokesman Mezabaul Haque said on Monday that they received the instalment on Thursday.

Central bank officials said Sri Lanka is expected to pay another instalment in August.

Bangladesh agreed to give Sri Lanka loans of at least $200 million from its foreign exchange reserves under a currency swap deal in 2021.

The credit was to be repaid in instalments over three months with 2 percent interest on the Libor rate, the central bank said at the time.

But as the economic and political crisis in Sri Lanka worsened, its external debt became unsustainable.

Bangladesh extended the deadline for the repayment several times.

With political stability gradually being restored, Sri Lanka is now moving towards repaying its debts.