Reciprocal investments by Sri Lanka and India’s central banks
View(s):The Central Bank of Sri Lanka (CB) and India’s Reserve Bank (RBI) on Thursday agreed to reciprocal investments in each others’ markets.
Under the bilateral agreement signed today (Thursday) on the sidelines of a meetingsof South Asian Governors of Central Banks, the CB will further diversify its reserves management activities into Indian rupee denominated assets while reciprocally, the RI would access the Sri Lankan government securities market, up to a maximum value equivalent of US$500 million, each way.
“As a result, the CB 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,” statement from the local banking regulator said.
CB Governor Ajith Nivard Cabraal and RBI Governor signed the agreement on the sidelines of the SAARCFINANCE Governors’ Symposium being held in Colombo.