Line of credit in Sri Lanka: the Sri Lankan FM will ask for the strengthening of a line of credit of one billion dollars
The visit was finalized during a telephone conversation between Minister Rajapaksa and Indian Foreign Minister S Jaishankar last week.
Sri Lanka effectively devalues its currency as its foreign exchange reserves dwindle and Colombo struggles to service its debt and pay for its imports. On Saturday, Lanka’s central bank tightened trade restrictions, ordering exporters to repatriate foreign exchange earnings within 180 days of transactions, in a bid to boost the country’s depleting foreign exchange reserves.
Colombo, with just $2.31 billion in reserves, is struggling to pay for essential imports including fuel, food and medicine. Lanka will start talks with the International Monetary Fund (IMF) next month on a plan. Rajapaksa will travel to Washington in mid-April to present Sri Lanka’s proposal to the IMF.
Lanka had requested the billion dollar letter of credit from India. The two ministers should take stock of the progress of this proposal. Earlier, New Delhi extended a $500 million line of credit to the neighboring country for importing fuel from India. On top of that, India’s financial package for Sri Lanka, as announced in January, included a $400 million Saarc currency swap and the postponement of an Asian Union clearing settlement of $515 million. .2 million two months.
Ahead of Rajapaksa’s visit in a bid to boost the Lankan economy, a joint venture project between the Ceylon Electricity Board and India’s largest energy conglomerate, NTPC, was signed last Friday to set up a 100MW solar power plant in Sampur, Trincomalee.
The event was attended by Rajapaksa, new energy minister Pavithra Wanniarachchi and Indian high commissioner to Sri Lanka Gopal Bagley.
The Indian High Commission, announcing the signing of the joint venture, said it would enhance the India-Sri Lanka economic partnership for mutual prosperity, including through cooperation in renewable energy.
On Saturday, the High Commission tweeted about the visit of Lankan Finance Minister Rajapaksa to India. “His visit will consolidate the ongoing efforts to further strengthen the economic partnership between India and Sri Lanka,” he said.
There are reports that Adani Group may be involved in two separate $500 million renewable energy projects at Mannar and Pooneryn in Lanka. The Adani Group has also invested in the Western Container Terminal at the port of Colombo.