Convertible conversion deal:

Yuan to enter colombo

Yuan same status as US Dollar in Lanka:
Public-private partnership mulled:
More Chinese entrepreneurs welcome:

The Chinese Yuan will be made a convertible currency in Sri Lanka soon after the China Bank sets up operations in Colombo, Central Bank Governor Arjun Mahendran said.

Mahendran was a member of the high profile Sri Lankan delegation visiting China with Prime Minister Ranil Wickremesinghe. During the visit, representatives of the Sri Lankan government had extensive discussions with the Chinese government to strengthen bi-lateral ties between the two countries on the political and economic fronts.

Mahendran told the Sunday Observer, that with this new move, the Chinese Yuan will have the same status in Sri Lanka as the US Dollar.

The Central Bank Governor, however, did not disclose exact time-frames of the new arrangement.

“This decision is significant on many grounds. While it allows China to consolidate its economic position in this part of the world, it also enables Sri Lanka to have more interaction with China, financially, in terms of soft loans and other short and mid-term financial measures. It is a step in the right direction as China is positioning itself to be the global economic super-power in the coming years,” a senior economic analyst, who wished to remain anonymous told the Sunday Observer.

Meanwhile, Prime Minister Ranil Wickremesinghe told a business forum in Beijing, China, that the Sri Lankan government was looking at a public-private partnership and the government will play the role of a regulator. “We like to see Chinese entrepreneurs coming here and would offer a level playing field for them to carry on with their business without any hindrance,” the Prime Minister said.

The IMF, in November, last year, gave the greenlight to include the Chinese Yuan (RMB) among major currencies in the SDR basket alongside the US dollar, Japanese Yen, Sterling and Euro.