In an effort to support Sri Lanka by stabilising the nation’s economy amid an ongoing economic crisis, the International Finance Corporation (IFC), a member of the World Bank Group, has stepped forward to provide a cross-currency swap facility to Sampath Bank PLC, along with two other private banks.
Accordingly, the IFC notes that USD 400 million will bea cross currency swapover a period of one year to Sampath Bank and two other private banks. After recognising that Sampath Bank is among the three of the country’sleading national banks which facilitates over 30 percent of Sri Lanka’s remittances and exports. Themove is expected to enhance the dollar denominated import of essential goods, while also strengthening the two decade long relationship between Sampath Bank and IFC.
In addition to supporting Sampath Bank’s financing of exports of goods and services for their clients while also allowing the country to make USD-denominated debt repayments. Sampath Bank notes that through this facility, it will now be able to improve access to medium and long-term finance for its clients, helping local businesses sustain their valued operations.
Speaking on this development, Nanda Fernando, Managing Director of Sampath Bank PLC said, “The facility provided by IFC comes at a juncture where the Sri Lankan economy is facing a challenging time. The transaction will enable Sampath Bank to better manage our foreign currency holding by borrowing at lower rates and manage our foreign currency exposure, while facilitating foreign currency lending to our customers across the whole economy. The transaction will also renew the longstanding relationship with IFC, which was spread across many business areas such as trade, foreign exchange, and financial services. Sampath Bank is also grateful for the trust placed by IFC by continuing to engage as a major business partner in Sri Lanka and is confident that this will lead to a long and fruitful relationship.”
Over the past five decades, IFC has been committed to supporting Sri Lanka’s economic growth, and this latest facility is yet another example of its continued partnership with the nation. Throughout the COVID-19 pandemic, IFC has played a crucial role in supporting the Sri Lankan economy, investing over $830 million to provide long-term capital and trade financing to businesses in need, thereby preserving jobs and sustaining operations.
This cross-currency swap facility is a testament to IFC’s commitment to promoting economic stability and resilience in Sri Lanka, and is therefore pleased to be able to work with Sampath Bank and two other private banks to provide essential support during these challenging times.