Lanka vows to repay Bangladesh within stipulated time

Sri Lanka Central Bank Governor Nandalal Weerasinghe said on Wednesday that the country will pay back the debt they owe to Bangladesh before the end of the stipulated one-year period.

Nandalal Weerasinghe made the remarks at a bilateral meeting with the Bangladesh Bank Governor Abdur Rouf Talukder held at the annual meeting of the World Bank Group in Washington.

“Sri Lanka is trying to turn around. So, I think the country can repay the debt,” Abdur Rouf said.

Sri Lanka has already approached IMF and others to tackle the ongoing financial crisis, and India is among the nations helping to reconstruct the country’s fragile economy. Hence, Weerasinghe has promised that paying down the debt will not be an issue.

In May 2021, Bangladesh agreed to lend Sri Lanka $200 million on the condition that it will be repaid within three months. Then in 2021, Sri Lanka fell into an extreme crisis. In the end, the island state declared itself bankrupt, and it became uncertain whether the country would be able to repay the debt to Bangladesh.

In 2022, Bangladesh Bank extended the loan repayment period another year to give the Island nation a respite so that it can overcome its worst-ever debt and economic crises. The repayment period was fixed according to the currency swap policy. Then, the country assured that it will repay the debt before May next year.

At the annual meeting of the World Bank Group, the World Bank president expressed fear that developing countries may not repay their loans properly.

In response to a journalist’s question about the situation in Bangladesh, Bangladesh Bank Governor Abdur Rouf said that currently Bangladesh’s foreign debt is 13 to 14 per cent of the GDP. This rate is very negligible compared to any other country in the world. Therefore, it would not be a problem for Bangladesh to repay the loan.

“According to global credit rating agencies, we are a stable country in terms of debt repayment.”

Abdur Rouf also mentioned that two of the world’s largest banks, JP Morgan and Standard Chartered, have expressed interest in helping Bangladesh, showing interest in holding meetings with the central bank governor.

“We have told them that if the Bangladesh government ever takes a commercial loan, their proposals would be kept in mind,” he said, adding that he has proposed that the banks assist the private sector of Bangladesh.

Abdur Rauf Talukder said that the governors of Commonwealth countries’ central banks will meet as part of the annual meeting of World Bank. Bangladesh will preside in this meeting.