COLOMBO (Reuters) - The central banks of India and Sri Lanka signed a bilateral agreement allowing them to buy up to the equivalent of $500 million in each other's government debt to diversify their currency reserves, the Sri Lanka central bank said in a statement on Thursday.
"The central bank of Sri Lanka could now access one of the growing securities markets in the world, realising a considerably higher return for the funds invested," it said in a statement.
"At the same time, the RBI investments in the Sri Lankan government securities market would lead to greater stability in the Sri Lankan government bond market."
(Reporting by Shihar Aneez and Ranga Sirilal; Editing by Rafael Nam)