Tuesday, May 28, 2024
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India‘s US $ 1 billion swap to Sri Lanka gets further delayed raising concerns

India seems to have been tightening it’s strangle hold on Sri Lanka by delaying the release of US $1 billion currency swap to meet its debt repayment obligations this year and tide over the current economic crisis,reliable official sources claimed.

The island nation is banking on this loan facility to keep its head above water in the present dollar crisis period.

But the signing of this agreement will be further delayed as result of the postponement of Finance Minister Basil Rajapakasa’s official tour of New Delhi not because of the inaction of Indian diplomatic authorities to facilitate the visit, a reliable official source said.

The Sri Lankan Finance Minister was scheduled to leave the country for India on Friday 25 but it has been postponed at the last minute due to delay of the Indian diplomatic authorities to make arrangements on that date.

It has been revealed that Indian side is still to fix an exact date for Finance Minister Basil Rajapaksa’s viist to New Delhi.

Sri Lanka’s delaying tactic of Trincomalee oil tank farm and Mannar basin oil ex exploration deals in exchange of India for its recent $1.4 billion million financial facilities granted to the country to import fuel has fuelled some concerns of the Indian side, an expert on foreign affairs claimed.

The relief extended by India from the beginning of this year totals over $1.4 billion —a $400 currency swap, a $500 loan deferment and a $500 Line of Credit for fuel imports. Sri Lanka is further negotiating$1 billion assistance from India to help the near 22 million-strong country as it faces an unprecedented economic crisis.

The island nation has already serviced part of its debt this year, and is preparing to repay the remaining more than $3 billion over the next six months, officials said.

With an international sovereign bond maturing soon, a $1 billion repayment is due in July.

“We are expecting this facility to meet urgent needs an its is crucial for us ,” said the official, who spoke on condition of anonymity given the sensitivity of the ongoing bilateral negotiations.

Sri Lankan President Gotabaya Rajapaksa had in May 2020 asked Prime Minister Narendra Modi for a “special” $1.1-billion currency swap to help the country boost its foreign reserves.

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