The Central Bank of Sri Lanka’s (CBSL) November-end data shows the country will have to pay foreign loans amounting to US $1.79 billion in January and February, senior financial journalist Shihar Aneez reported.
He said the loan repayments include the US $500 million International Sovereign Bond (ISB) required to be settled on January 18.
Out of the US $3.1 billion reserves Sri Lanka had by the end of December 2021, only $1.6 billion could be used for loan repayment as the US $1.5 Chinese swap is in Yuan.
Unless there is a huge chunk of Chinese debt repayment and China agrees to be repaid by Yuan, most loans have to be paid in US dollars, Aneez pointed out.
He further said that even if Sri Lanka’s total imports are financed by the export and tourism revenue, and remittances, the country still needs a large number of dollars to shore up its reserves.
The senior financial journalist also stated that India’s $400 million swap and Qatar’s expected $500 million swap will boost reserves, but still, Sri Lanka may fall short.
Shihar Aneez said the nation’s need for more loans, credit lines, and swaps will result in the vicious cycle most likely continuing, and with Sri Lanka having to bow down to all, just to get some dollars loans and reserves. (NewsWire)
#SriLanka @CBSL November end data show the country will have to pay $1.79 bln foreign loans in January and February including $500 mln ISB on Jan 18. Out of $3.1 bln reserves #lka had by end Dec, only $1.6 bln could be used for loan repayment as $1.5 Chinese swap is in Yuan pic.twitter.com/2uR7S1XL74
— Shihar Aneez (@shiharaneez) January 6, 2022
Unless there is huge chunk of Chinese debt repayment & #China agrees to be repaid by Yuan, most loans have to be paid in US$. Even if #SriLanka's total imports are financed by export+tourism revenue & remittances, #lka still needs large amount of dollars to shore up its reserves
— Shihar Aneez (@shiharaneez) January 6, 2022
India's $400 mln swap, Qatar's expected $500 mln swap will boost reserves, but still we may fall short & need for more loans, credit lines, and swaps and the vicious cycle likely to continue with Sri Lanka will have to bow down to all, just to get some $ loans and reserves
— Shihar Aneez (@shiharaneez) January 6, 2022