Bank of China Limited offers RMB 2 billion senior secured revolving credit facility to boost Sri Lanka's foreign exchange reserves

Bank of China Limited offers RMB 2 billion senior secured revolving credit facility to boost Sri Lanka's foreign exchange reserves On November 23, 2021, Sri Lanka's Minister of Finance presented to the Government of Sri Lanka's Cabinet of Ministers a Cabinet Memorandum seeking approval to proceed with a 'Proposed Senior Secured Revolving Credit Facility Offered by the Bank of China Limited to the Central Bank of Sri Lanka.' The memorandum stated that 'Bank of China Limited (BoCL) has submitted a proposal of a Senior Secured Revolving Credit facility to the Central Bank of Sri Lanka (CBSL) up to 2 billion Chinese yuan (CNY), also known as renminbi (RMB), (equivalent to USD 300 million approximately), with the possibility of increasing in the event of an over subscription depending on the syndication demand.' Following multiple rounds of discussions and negotiations, BoCL agreed that the full amount (equivalent to USD 300 million approximately) can be drawn on the day the facility is available for the CBSL and maintained in a nostro account opened in BoCL Mainland China.

Hence, those funds will be considered as a part of the CBSL foreign reserves from the date of withdrawal.