Government eyeing billion-dollar swap with Central Bank of Qatar: Semasinghe

Among a number of other bilateral arrangements that are currently being worked out to shore up the country’s foreign currency reserves which fell to dangerously low levels in November, the Central Bank is working towards entering into a billion dollar currency swap with its Qatari counterpart.  
Responding to repeated questioning by Opposition legislators over the razor-thin reserve buffers in Sri Lanka, Shehan Semasinghe, the ruling party MP and the State Minister for Samurdhi, Household Economy, Micro-finance, Self-employment, Business Development and Under-utilised State Resources Development, last week told Parliament that the arrangement with the Qatar Central Bank is in the works among a string of other funding lines. 
“We have worked towards entering into over a billion dollar swap arrangement between the Qatari Central Bank and Sri Lanka’s Central Bank,” Semasinghe said. 
The announcement came after an earlier bilateral funding arrangement for US$ 3.6 billion with the Qatar government to support oil imports fell apart. 
Sri Lanka’s external reserves fell to US$ 1,587 million in November, equivalent to roughly about a month of imports renewing concerns about the country’s ability to sail through the current foreign exchange crisis without a hard landing of its economy. 
Semasinghe also told parliament that the government had also obtained a US$ 400 million swap from the Reserve Bank of India (RBI) as part of the SAARC financing facility to support the member countries in the bloc facing foreign currency troubles. 
“We have obtained US$ 400 million under the SAARC swap facility from the Reserve Bank of India,” he said. 
It wasn’t immediately clear whether he was referring to re-entering the facility, which Sri Lanka settled in February this year, as there wasn’t still a formal announcement from the Central Bank to this effect. 
However, the Central Bank in July indicated its intention to re-enter the facility, which requires a minimum of six months since the date of the settlement. 
Finance Minister Basil Rajapaksa was in India a fortnight ago for high level talks with his Indian counterpart regarding two separate swap lines totalling US$ 1.4 billion and another US$ 500 million bilateral credit line to fund imports of oil, essential items and drugs. 
Minister Semasinghe also told parliament that they are working towards US$ 300 million from what was referred to as, ‘consolidate funding arrangements’, and another swap valued at US$ 500 million from licensed commercial banks, provided no other specifics. “We have also worked towards obtaining another US$ 300 million under the consolidated funding arrangements,” he said.  
“We have also worked towards entering into US$ 500 million worth swap arrangements with licensed commercial banks,” he added. Markets are fast losing hope in the six-month road map announced on October 1 by Central Bank Governor, Ajith Nivard Cabraal, which lined up approximately US$ 10 billion in fresh inflows during the six months to March next year as nothing concrete has happened since then. 
Opposition MP, Dr. Harsha de Silva joining in the debate last week pointed out the precarious nature of the economy due to the absence of the promised inflows as enunciated in the road map and invited the government to engage with the international funding agencies for medium to longer term funding support instead of stop-gap measures which are unlikely to solve the brewing crisis at present.