CB Governor on Yuan instead of USD agreement

September, 17, 2014

The currency swap bilateral agreement entered into between the Central Bank of Sri Lanka and the People’s Bank of China aims at promoting the exchange of the Chinese Yuan and Sri Lankan Rupee between the countries for trade and other agreed purposes. This would benefit the trade links between the countries, said the Governor of the Central Bank of Sri Lanka.

While speaking to AdaderanaBiz.lk CBSL Governor Ajith Nivard Cabraal said that under this agreement China would provide 10 billion Yuan to Sri Lanka and that this would strengthen Sri Lanka’s foreign reserves.

Sri Lanka is to provide Rs. 225 billion or this Chinese money thus provided.

“This is not a loan. The receipt of Yuan 10 billion would make transactions possible between the two countries in dollars, pounds as well as directly in Yuan. This would open up more opportunities for Chinese tourists to Sri Lanka to pay their hotel bills directly in Yuan.

“Currently Sri Lankan hotels prefer to accept dollars. If more Chinese tourists are to be attracted then the opportunities for them to pay in Sri Lanka in their own currency should be increased. Similarly, this agreement would make it possible for Sri Lankans to pay in Rupees in China. This is the beginning for the two countries to transact in their own currencies,” said Governor Ajith Nivard Cabraal.

This agreement is valid for three years.

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