Sri Lanka is in engagement with China to amend the terms and conditions of the US 1.5 billion currency swap deal so that it can be used, a top source said.
According to the terms and conditions stipulated in the agreement signed with China for the swap arrangement, it cannot be used unless Sri Lanka has foreign reserves sufficient for three months. The deal is on hold because Sri Lanka has run short of the required amount of reserves. The swap deal enables Sri Lanka to borrow Yuan (Chinese currency) for payment of imports.
However, the Sri Lankan authorities have now requested the Chinese side to amend the particular clause of the agreement to make use of this currency facility extended to Sri Lanka. The swap deal was signed last year. According to the source, the Sri Lankan side informed that the amendment of the clause would be beneficial for China since it would be used for the imports of Chinese products.
Besides, Sri Lanka is in negotiation with several Chinese companies to purchase chemical fertilizer on credit for the next Maha season. The Agriculture Ministry is now required to come out with the quantity of requirement. (Kelum Bandara)