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India extends USD 900 million to help Sri Lanka’s economic recovery and growth

India has extended over USD 900 million facilities to Sri Lanka in line with its strong commitment to stand with Sri Lanka for economic recovery and growth.

This includes deferment of Asian Clearing Union settlement of over USD 500 mn and currency swap of USD 400 mn.

India’s High Commissioner in Sri Lanka Gopal Baglay on Thursday met with Governor of the Central Bank of Sri Lanka Nivard Cabraal and expressed India’s support to the island nation.

The Indian High Commission in Sri Lanka provided the details in a series of tweets.

“High Commissioner met Gov @CBSL and expressed #India’s strong support to #SriLanka in the wake of @RBI extending over USD 900 mn facilities over the last week,” it stated.

“These comprise deferment of Asian Clearing Union settlement of over USD 500 mn and currency swap of USD 400 mn,” the tweet added.

“The Indian High Commissioner to Sri Lanka noted that these steps are in line with India’s strong commitment to stand with Sri Lanka for economic recovery and growth,” it further said.

Earlier this week, Central Bank of Sri Lanka Governor Cabraal had said that his country was negotiating a USD one billion loan from India to import goods from the country amidst a shortage of all essential commodities.

The COVID-19 pandemic has hit the South Asian country hard, forcing the Government to last year declare an economic emergency, after a steep fall in the value of its currency taking inflation to a high level. 

Sri Lanka is staring at a loss of revenue from tourism, high government spending and tax cuts eroding state revenues, huge debt payments and foreign exchange reserves at their lowest level in a decade have added to the crisis.

India and Sri Lanka had last month, finalized a four-point package for economic cooperation that includes an extension of a line of credit to Sri Lanka cover and offer of a currency swap arrangement during Sri Lankan Finance Minister, Basil Rajapaksa’s visit to India, a statement by the Indian High Commission had said last month. 

During his visit on December 1-2, Sri Lankan Finance Minister Rajapaksa had briefed the Indian side of the economic situation in Sri Lanka and his Government’s approach to addressing post-covid challenges, it had informed. 

The Indian Ministers expressed India’s solidarity with Sri Lanka at this juncture, the statement had added. 

They reiterated that India has always stood by Sri Lanka and in the current situation would be guided by its Neighbourhood First policy, it had further stated.

INDIA NEWS NETWORK

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