Central Bank signs investment deal with Reserve Bank of India

Friday, 25 July 2014 00:18 - - {{hitsCtrl.values.hits}}

The Central Bank of Sri Lanka (CBSL) and the Reserve Bank of India (RBI) yesterday entered into a landmark bilateral agreement. The deal enables CBSL to further diversify its reserves management activities into Indian rupee-denominated assets, while reciprocally, RBI is able to access the Sri Lankan Government securities market, up to a maximum value equivalent of $ 500 million, each way. As a result, the CBSL could now access one of the growing securities markets in the world, realising a considerably higher return for the funds invested. At the same time, the RBI investments in the Sri Lankan Government securities market would lead to greater stability in the Sri Lankan Government bond market.

The Central Bank said this historic agreement also set the stage for the Central Bank Economists’ Meeting due to commence on 25 July, in Colombo which is on the theme ‘Reaping Mutual Benefits through Intra-regional Investments of Reserves’. Central Bank Governor Ajith Nivard Cabraal exchanged the bilateral investment agreement with the Governor of the Reserve Bank of India Dr. Raghuram Rajan on the sidelines of the SAARCFINANCE Governors’ Symposium.