Sri Lankan FM to visit India to formalise economic relief package
- IBEF
- February 16, 2022
Sri Lankan Foreign Minister G L Peiris stated that Sri Lanka's Finance Minister Basil Rajapaksa will visit India in a fortnight to formalise India's economic relief package for the island nation, which is experiencing a severe forex crisis.
Rajapaksa's last visit to India in December yielded many positive results, as Sri Lanka received US$ 2.4 billion in aid from India as a result.
In January, India provided a US$ 900 million loan to Sri Lanka to help it replenish its depleted foreign reserves and import food, amid a countrywide shortage of practically all necessary commodities, including power and fuel. The economic support package comprised of a US$ 400 million currency exchange to replenish depleted foreign reserves, a US$ 515 million deferred Asian Currency Union settlement, and another US$ 1.5 billion Indian credit line to ease shortages of essentials with imports from India.
As part of the urgent economic aid package, an agreement to offer Sri Lanka a credit line of US$ 500 million for fuel imports was signed in early February. Later, the Cabinet approved a purchase of 40,000 metric tonnes of fuel and petrol from the Indian Oil Corporation, which was independent of the US$ 500 million credit line.
The next visit by Rajapaksa will be crucial for Sri Lanka to get the US$ 1 billion credit line for food and medication imports.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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