The Reserve Bank of India has signed necessary documents for extending a USD 400 million currency swap facility to Sri Lanka to boost the island nation’s draining foreign exchange reserves due to the coronavirus pandemic, the Indian High Commission here said on Saturday.

 The currency swap arrangement will remain available till November 2022, the Indian mission said in a press release.

Sri Lanka in April said it was set to enter into an agreement with the RBI for a currency swap worth USD 400 million under the South Asian Association for Regional Cooperation (SAARC) framework to boost the foreign reserves and ensure financial stability of the country which is badly hit by the COVID-19 pandemic.

In May, President Gotabaya Rajapaksa made an additional request to India for a special USD 1.1 billion currency swap facility.

“Breaking Good News! Reserve Bank of India signs document for  USD 400 million currency swap facility to #SriLanka till Nov 2022,” the Indian mission tweeted on Friday. “After debt repayment rescheduling discussions yesterday, this development is another example of India’s strong  commitment to work with #lka in post #COVID19SL economic recovery,” it said.

The High Commission has conveyed this information to senior officials in the Government of Sri Lanka and the Central Bank of Sri Lanka, the statement said.

Earlier, on July 14, Deputy High Commissioner Vinod K. Jacob had met and discussed the currency swap arrangement with the Governor of the Central Bank of Sri Lanka, Prof WD Lakshman, it said.

The two countries also held technical discussion on rescheduling of bilateral debt repayment by Sri Lanka on July 22. An Indian delegation comprising senior officials from the Ministry of External Affairs, Ministry of Finance, and the EXIM Bank interacted with representatives from the Department of External Resources of Sri Lanka through a video conference.