Wednesday, September 27, 2023

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SL Finance Minister Leaves for India to sign US$ 1 billion agreement   

Finance Minister Basil Rajapksa left the Island for India for a two day official tour  on Tuesday 15 following his meeting with IMF Asia and Pacific Department Director Changyong Rhee.

He was accompanied by Finance Ministry Secretary S.R Artygalle keeping the treasury virtually headless for couple of days, official sources said.

Amid the worsening economic situation in the country, Sri Lankan Finance Minister Basil Rajapaksa begin his India visit, hoping to seal a USD 1 billion line of credit (LoC)


The aim of their New Delhi visit  to sign the agreement to obtain a loan facility of US$.1 billion to purchase essential food items, medicinal drugs and other commodities. 

This visit was postponed twice as the Indian side was not ready to receive the Sri Lankan Finance Minister as New Delhi authorities were making preliminary arrangements for the official tour at that time. 

Measures will be taken to formalise India’s economic relief package for the island nation facing a serious forex crisis during this visit,.a senior Finance Ministry official said. 

This will be Mr. Rajapaksa’s second visit to New Delhi in two months.In January, India announced a $ 900 million loan to Sri Lanka to build up its depleted foreign reserves and for food imports, he added 

External Affairs Minister S Jaishankar earlier in January held a virtual meeting with Basil where the two ministers reviewed the progress in extending the Indian credit facility of USD 1 billion for importing food, essential items and medicine.

India provided more than USD 500 million in foreign currency swaps to strengthen Sri Lanka’s foreign reserves, taking the total up to USD 900 million. India also extended the repayment time frame for the USD 500 million debt of Sri Lanka under the Asian Clearance Arbitration.

The island nation ha s to  repay about USD 4 billion in foreign debt this year.The decision to engage with the IMF  comes following months of resistance from the government despite calls from Opposition leaders and experts for a recovery plan.

Moreover, Sri Lanka’s forex reserves have depleted to 2.3 billion US dollars by February 2022.

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