The Sri Lankan Government is seeking US$ 1.4 billion from India, in addition to an already announced US$ 500 million credit line.
Central Bank Governor Ajith Nivad Cabraal told the Colombo media the terms and conditions for the new US$ 1.4 billion swap deal would be disclosed after the talks were completed.
He said the latest swap would help to boost Sri Lanka’s foreign reserves.
The talks on the swap arrangement are in addition to negotiations for a US$ 500 million Indian credit line for fuel purchases.
The move comes as Sri Lanka is expected to meet international commitments up to US$ one billion by mid next year.
in 2019, the new government had paid up six billion US dollars last year and another US$ 6.6 billion this year for foreign debts.
However, the repayments this year and next year include commitments with regard to loans taken during the 2010-2015 Mahinda Rajapaksa government, when Mr. Cabraal was the Governor of the Central Bank.
Mr Cabraal said loans obtained in the latter part of the last government had aggravated the situation as it had taken loans up to seven billion US dollars from April 2018 to January 2019 at the commercial rates of 8 percent interest.
“We will not go for commercial loans in the future, but will opt for government-to-government loans or swap arrangements between Central Banks,” he said.
The Governor said the Government would, however, not go for bailout packages of the International Monetary Fund (IMF).