Nov 04, 2016

Chinese Renminbi to be made convertible currency in Sri Lanka

Sri Lanka Central Bank has entered into a Comprehensive Cooperation agreement with China Central Bank to ease financial transactions between the two countries, a high ranking official of the Ministry of International Trade said.

This move will enable Sri Lanka to get over the counter financial facility and direct bank to bank money transfers without any hassle and double quick time, he pointed out.

According to this Comprehensive Cooperation agreement between the two monetary regulators of both countries, , the Chinese Yuan (Renminbi) will be made a convertible currency in Sri Lanka soon after the China Bank sets up operations in Colombo.

This agreement wills Sri Lanka to have more interactions with China, financially, in terms of soft loans and other short and mid-term financial measures with China.

China's IZP group which has stepped in to take over the 80 percent stake of Mattala Airport expressed willingness to introduce a payment system to allow direct settlement between Renminbi and local currency and a Visa-like payment card that also provides lower fees.

At present, international transaction with China requires local currency to be converted to dollars and then converted back to Renminbi (or vice versa) for international transactions.

IZP is planning to roll out Renminbi financial architecture and popularize online retail along China's One Belt One Road initiative which seeks to revive an ancient Silk Route from Europe to China, at strategic 'Silk Road Stations' along the way.