Sri Lanka Successfully Clears USD $200 Million Debt to Bangladesh Amid Economic Recovery

Sri Lanka has marked a significant achievement by fully settling its USD $200 million loan to Bangladesh, originally secured through a currency exchange agreement two years ago. This milestone comes after a turbulent period marked by a severe dollar shortage, financial instability, and multiple extensions.

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President Ranil Wickremesinghe held a meeting with the Prime Minister of Bangladesh, Sheikh Hasina, in New York recently

In a final installment on Thursday night, Sri Lanka made a payment of approximately $50 million, accompanied by $4.5 million in accrued interest, as confirmed by a senior official from the Bangladesh Bank. This successful repayment concludes a tumultuous chapter that began in May 2021 when Sri Lanka initially sought the loan for a one-year term.

Regrettably, Sri Lanka encountered difficulties in honoring its debt commitments due to a worsening domestic economic crisis, eventually leading to the Sri Lankan government declaring itself financially distressed. Consequently, the country repeatedly requested extensions for the repayment of the debt.

This year, Sri Lanka’s economic outlook began to show signs of improvement, enabling the nation to regain its financial stability. According to the Bangladesh Bank, Sri Lanka embarked on its journey to settle the debt by repaying an initial $50 million on August 20. Subsequently, on August 31, Sri Lanka returned $100 million, and the final $50 million was successfully repaid on Thursday night.

Sri Lanka’s ability to meet its financial obligations demonstrates not only its dedication to fiscal responsibility but also a positive shift in its economic trajectory. This three-part repayment signifies a turning point in the nation’s financial resilience and serves as a testament to its commitment to overcoming economic challenges.

Sri Lanka Guardian

The Sri Lanka Guardian is an online web portal founded in August 2007 by a group of concerned Sri Lankan citizens including journalists, activists, academics and retired civil servants. We are independent and non-profit. Email: editor@slguardian.org

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