A 10 billion yuan (about 1.5 billion US dollar) swap line for Sri Lanka’s central bank with the People’s Bank of China amount to 10 billion yuan is in an advanced stage, State Minister for Money and Capital Markets Nivard Cabraal said.

“The swap with China is in a state of advanced progress,” Minister Cabraal said. It will be at very advantageous terms.”

Sri Lanka has reported 5,555 million dollars of gross official reserves by November 2020.

Sri Lanka has already drawn down on a 400 million dollar swap with the Reserve Bank of India to boost reserves.

Sri Lanka is also negotiating another 1,000 million US dollar swap line with the Reserve Bank of India.

The central bank in September executed a billion dollar repo with the Federal Reserve, against dollar securities, which does not change the total gross reserve number.

The repo facility extends Fed monetary policy reach worldwide allowing the agency to provide dollars to central banks which are not eligible for swaps without running forex or default risks.

The facility reduces pressure on US domestic Treasuries markets by delaying or eliminating the sale of securities by pegged central banks in particular, in times of global market stress who would otherwise have sold the securities outright defend pegs or repay debt.