Helping hand: India will give 500 million dollars more to Sri Lanka for fuel purchase, neighboring economy is in bad shape
India has agreed to give an additional loan of $ 500 million to Sri Lanka, which is facing severe economic crisis. India has come forward to help Sri Lanka amidst the delay in getting the rehabilitation package from the International Monetary Fund. Sri Lanka's Finance Minister Ali Sabri gave this information. Sri Lanka does not even have money to import oil. Its foreign currency has been depleted and the currency has also become devalued. Inflation has also become uncontrollable in the country. Sabri said on Friday that India has agreed to give us an additional $500 million for oil imports and is expected to consider an additional loan of $1 billion. India has already agreed to defer import bill payments of $1.5 billion to Sri Lanka. Sri Lanka has to pay this amount to the Asian Queiling Union.
On Friday itself, the High Commission of India said that New Delhi has also extended the term of the $ 400 million swap awarded in January this year. Sabri is currently in Washington to hold talks with the IMF on the rehabilitation package. Sabri said that talks have started regarding the rehabilitation package, some things are yet to be finalised. Sri Lanka needs at least $ 4 billion to deal with the severe economic crisis. Apart from the IMF, Sabri is also making efforts for financial help from the World Bank, China and Japan.
Next nine months
Sri Lanka's finance minister said the next nine months would be a difficult period. During this, more dollars will need to be brought into the country's central bank. If there is an investment of US$ 2 billion in the Reserve Bank of Sri Lanka, it will help prevent devaluation of the currency and stabilize the Sri Lankan rupee.
Failed to repay the loan for the first time
On 12 April this month, Sri Lanka announced for the first time in its history that it was temporarily unable to repay its debt. The Sri Lankan government had said it would temporarily default on foreign debt of US$35.5 billion, as the pandemic and the war in Ukraine made paying foreign creditors impossible.