Sri Lanka pays off $200m loan from Bangladesh with $4.5m interest

Sri Lanka has paid off the entirety of USD $200 million loan from Bangladesh, taken through a currency exchange agreement two years ago to survive the severe dollar shortage, reports UNB.

In the last installment, Sri Lanka paid about $50 million and $4.5 million in interest on the loan on Thursday night, a senior official of Bangladesh Bank said.

Sri Lanka took this loan for a period of one year in May 2021. However, the country failed to repay the loan due to a worsening domestic economic crisis and the Sri Lankan government declared itself bankrupt. That's why the country took extension to repay the debt several times.

This year, Sri Lanka's economy started to turn around and the country was able to repay the debt.

According to Bangladesh Bank, Sri Lanka initially repaid $50 million on 20 August. Then on 31 August, it returned $100 million. Finally, they returned the remaining $50 million on Thursday night.

Sri Lanka has paid off the loan taken from Bangladesh in three installments.