The World Bank says it will provide Sri Lanka with a $400 million currency exchange facility to fund the country’s essential imports.
The International Finance Corporation (IFC), the investment arm of the World Bank, has announced this.
Three private banks, which handle more than 30% of Sri Lanka’s remittances and exports, will receive this funding facility, IFC said in a statement today.
Accordingly, this financial transfer facility will be available for funding essential imports including medicines, food and fertilisers.
The funds will provide much-needed foreign exchange relief to Sri Lanka, which is grappling with its worst financial crisis in more than seven decades, due to a severe dollar shortage.
“We expect this financing to boost confidence in the investor community and attract fresh capital inflows to support the Sri Lankan economy.” said Joon Young Park, Financial Equity Manager, IFC, Group of Financial Institutions for South Asia.
According to World Bank data, the country’s economy is estimated to contract by 9.2% in 2022 and is expected to contract by another 4.2% in 2023.