IFC provides $400 mn financing to Sri Lanka's leading banks

The facility will support the private sector with critical financing and contribute to the country's urgent need to stabilise the economy. The banks involved in the facility—Commercial Bank of Ceylon (CBC), Nations Trust Bank, and Sampath Bank—deal with over 30 per cent of Sri Lanka's remittances and exports.

The IFC facility will help facilitate the import of essential goods, which are mostly traded in US dollars. It will also support the banks' financing of exports of goods and services for their clients while allowing them to make US-dollars-denominated debt repayments.

This cross-currency swap facility follows the reactivation of trade finance lines with IFC partner banks under the Global Trade Finance Program earlier this year. The move will allow CBC and Sampath Bank to improve access to medium and long-term finance for their clients, helping local businesses sustain operations.

"Sri Lanka's economy continues to feel the severe US dollars funding constraints. IFC's cross-currency swap facility will provide critical forex liquidity, helping support the private sector and encouraging longer term funding flows to the market," said Joon Young Park, IFC's portfolio manager, financial institutions group for South Asia. "We expect this financing to boost confidence in the investor community, attract fresh capital inflows to support the Sri Lankan economy. We are also working on further plans to support our client banks with other long-term funding and advisory services in the future."

ALCHEMPro News Desk (DP)