Sri Lanka has paid off the entirety of the $200 million loan from Bangladesh, taken through a currency exchange agreement two years ago to survive the severe USD shortage.
In the last instalment, Sri Lanka paid about $50 million and $4.5 million in interest on the loan on Thursday night, Bangladesh Bank Executive Director and spokesperson Mezbaul Haque confirmed the matter to The Business Post.
Sri Lanka took this loan for a period of one year in May 2021. However, the country failed to repay the loan due to a worsening domestic economic crisis. The Sri Lankan government had declared itself bankrupt.
That was why the country took an extension to repay the debt several times. This year, Sri Lanka’s economy started to turn around and the country was able to repay the debt.
According to the central bank, Sri Lanka initially repaid $50 million on August 20. Then on August 31, it returned $100 million. Finally, they returned the remaining $50 million on Thursday night.
The country paid off the loan taken from Bangladesh in three instalments.
On the matter, former governor of Bangladesh Bank Dr Salehuddin Ahmed said, “Sri Lanka was able to pay it to Bangladesh as it was not a large amount. Bangladesh also has to pay long-term foreign loan instalments amounting to $1.62 billion in 2023 amid the ongoing USD crisis.
“Because of the burden of foreign investments, we need the USD in our banking sector.”
