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Sri Lanka to negotiate US$500mn in central bank swaps

Jan 03, 2012 (LBO) - Sri Lanka is planning to negotiate up to 500 million dollars in swaps with other central banks to bolster the island's external position, Central Bank Governor Nivard Cabraal said.
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From August the Central Bank started to sterilize forex sales as interbank markets ran out of liquidity.
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"All the swaps will be reaching about 500 million dollars this year," Governor Cabraal said.

"We need a little bit of buffer or a cushion. We do not really need to use it."

Sri Lanka already has a 200 million US dollars swap facility with Bank Negara Malaysia.

Sri Lanka's reserves fell 6.0 billion rupees by end 2011 from a high of 8.
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0 billion rupees in July amid strong credit growth and interventions.
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