Bangladesh's Central Bank invests in Lankan Bonds through Commercial Bank

THE Bangladesh Bank, the Central Bank of Bangladesh, has invested US $ 5 million in floating rate bonds issued by Government of Sri Lanka through Commercial Bank of Ceylon Ltd.

The rate of interest applicable on the Sri Lanka Development Bonds (SLDB) is six months London Inter-Bank Offered Rate (LIBOR) per annum plus a fixed margin.

The tenure of this SLDB's is two-years and Bangladesh Bank will receive coupon interest semi-annually.

"We are very proud to act as the primary dealer in facilitating this transaction which would benefit both Bangladesh and Sri Lanka," Commercial Bank's Assistant General Manager - Treasury Dula Weerathunga said, adding that "as a result the Sri Lankan government would be in a position to lessen its dependence on borrowing from multilateral donor agencies for financing of development projects."

The Bangladesh Bank's investment in SLDB is expected to help boost returns on Bangladesh's foreign exchange reserves.

The Commercial Bank of Ceylon entered the Bangladesh market in 2003 with the acquisition of Credit Agricole Indosuez's (CAI) banking operations in that country. The bank currently operates three branches in Motijheel and Dhanmondi Dhaka and in Chittagong and two booths in Gulshan and Sonargaon.