Sri Lanka seeks another USD 250 Mn loan from Bangladesh

Bangladesh is looking into cash-strapped Sri Lanka’s request for another loan of USD 250 million, the country’s Foreign Minister Dr AK Abdul Momen has said.

“They have made another approach and we will look into it. It will be another loan but it is not decided yet,” he said while responding to a question on the island nation’s deepening financial crisis on the sidelines of the 18th Bimstec ministerial meeting on Tuesday.

Regarding the global uncertainty, the minister said it is not clear how things will work out after the current situation in Ukraine and mentioned that Bangladesh mostly depends on imported energy. “So, we are watching it and seeing how we can help each other,” he added.

Dr Momen said, when Sri Lanka faced difficulties, Bangladesh went for a $250 million currency swap: “Sri Lanka is still finding difficulties. So, we extended the time for the repayment.”

It was the first-ever loan to any country from Bangladesh under the currency swap agreement inked by the BB and the Central Bank of Sri Lanka (CBSL) on August 3 last year.

The island nation’s debt load is apparently becoming increasingly difficult to manage as it also struggles to pay for imports of fuel and other necessities, leading to power cuts and other shortages.

The South Asian country of 22 million people is struggling to pay for essential imports after a 70% drop in foreign exchange reserves in two years.

Meanwhile, Sri Lanka has also sought an additional credit line from India to import essentials.