Sri Lanka seeks further $1.0b credit line from India to import essentials

[bluesky]

Sri Lanka seeks further $1.0b credit line from India to import essentials

Sri Lanka has sought an additional credit line of $1.0 billion from India to import essentials amid its worst economic crisis in decades, two sources said on Monday, as the Indian foreign minister began talks with the government of its neighbour. The island nation is struggling to pay for essentia

thefinancialexpress.com.bd

Sri Lanka seeks further $1.0b credit line from India to import essentials​

Published: March 28, 2022 17:04:26

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Sri Lanka's Army members standing guard at a Ceylon Petroleum Corporation fuel station in Colombo of Sri Lanka on March 22 to help stations distribute oil during the fuel crisis–Reuters file photo

Sri Lanka has sought an additional credit line of $1.0 billion from India to import essentials amid its worst economic crisis in decades, two sources said on Monday, as the Indian foreign minister began talks with the government of its neighbour.


The island nation is struggling to pay for essential imports of food and fuel after a 70% drop in foreign exchange reserves since January 2020 led to a currency devaluation and efforts to seek help from global lenders, reports Reuters.


New Delhi has indicated it would meet the request for the new line, to be used for importing essential items such as rice, wheat flour, pulses, sugar and medicines, said one of the sources briefed on the matter.

"Sri Lanka has requested an additional $1 billion credit line from India for imports of essentials," the second source said. "This will be on top of the $1-billion credit line already pledged by India."
Both sources declined to be identified as the discussions were confidential.
The finance and foreign ministries of Sri Lanka, as well as India's foreign ministry, did not immediately respond to requests seeking comment.

Sri Lankan Finance Minister Basil Rajapaksa signed the earlier credit line of $1 billion this month in the Indian capital of New Delhi to help pay for critical imports. Indian Foreign Minister Subrahmanyam Jaishankar met Rajapaksa on Monday after arriving in the Sri Lankan capital of Colombo late the previous day.

"Discussed the economic situation and India's supportive response," Jaishankar said on Twitter, with a photograph of the two officials next to each other. In addition to the credit lines, India extended a $400-million currency swap and a $500-million credit line for fuel purchases to Sri Lanka earlier this year.

Sri Lanka's imports stalled, causing shortages of many essential items, after foreign currency reserves fell to $2.31 billion by February. The nation just off India's southern tip has to repay debt of about $4 billion in the rest of this year, including a $1-billion international sovereign bond that matures in July.

Rajapaksa is set to fly to Washington, DC next month to start talks with the International Monetary Fund (IMF) for a rescue plan. "India is also very supportive of Sri Lanka's decision to seek an IMF programme and has given their fullest support," one of the sources added.

 

[coffee_cup]

Darn!

Pakistan must help friendly nation Sri Lanka in these times.

Send them some wheat, rice and other essentials at least.

 

[INS_Vikrant]

Why is it in BD section?

 

[Wood]

Sri Lankan economy is in a terrible situation. It has reached a point where citizens have to queue up for fuel and be subjected to load shedding for several hours a day. More tourists are leaving the country because of this causing a further downward spiral.

 

[INS_Vikrant]

Don't we have few SL members here to tell whether on groud situation is really that bad as reported in media

 

[Maula Jatt]

Sri Lankan economy is in a terrible situation. It has reached a point where citizens have to queue up for fuel and be subjected to load shedding for several hours a day. More tourists are leaving the country because of this causing a further downward spiral.

Tough times are part and parcel of every nation
Hope they come out strong from this crisis

 

[Wood]

Tough times are part and parcel of every nation
Hope they come out strong from this crisis

It will be difficult for Sri Lanka to avoid a default unless IMF gives them some help. We'll see if Uncle Sam decides to help Sri Lanka

 

[Flash_Ninja]

Tough times are part and parcel of every nation
Hope they come out strong from this crisis

Sri Lankans are tough people but Pakistan should try and help them however we can.

Instead of sending billions of rupees and tonnes of wheat to Afghanistan for their netizens and politicians to criticise, we should instead send aid to Sri Lanka.

 

[Maula Jatt]

Sri Lankans are tough people but Pakistan should try and help them however we can.

Instead of sending billions of rupees and tonnes of wheat to Afghanistan for their netizens and politicians to criticise, we should instead send aid to Sri Lanka.

they went through insurgency too although much longer than ours - so clearly a very mentally tough people/nation
shows character
they need Chinese help more than anyone else's- I think China should seize this opportunity

 

[INS_Vikrant]

they need Chinese help more than anyone else's- I think China should seize this opportunity

Yes china should write off billions of dollars of debt SL owes to them and also give up their 100 year long lease on SL's Port

 

[Maula Jatt]

Yes china should write off billions of dollars of debt SL owes to them and also give up their 100 year long lease on SL's Port

act as IMF with their $$$

 

[Sayfullah]

Darn!

Pakistan must help friendly nation Sri Lanka in these times.

Send them some wheat, rice and other essentials at least.

We don’t have any extra for our selves we’re importing wheat from Russia. But I agree we should still attempt to help in any way we can.

Sri Lankans are tough people but Pakistan should try and help them however we can.

Instead of sending billions of rupees and tonnes of wheat to Afghanistan for their netizens and politicians to criticise, we should instead send aid to Sri Lanka.

Afghanistan is suffering a humanitarian crisis Sri Lanka isn’t. Also if we stop sending aid to Afghanistan, they’ll come to Pakistan as refugees and don’t mention complete shut the border because our government neither has the guts to do that or can actually do it because it’s a lot harder in reality. I rather we send aid to Afghanistan then take in millions of afghans who’ll drain our resources.

they went through insurgency too although much longer than ours - so clearly a very mentally tough people/nation
shows character
they need Chinese help more than anyone else's- I think China should seize this opportunity

China being a country like every other country puts its interest first. The harsh reality is no one is ready to bail Sri Lanka out because they will default sooner or later. It’s the harsh truth. China has nothing else to gain from Sri Lanka it already has got their port on 100 year lease.

PAKISTAN can step up and provide a loan of $500 million to Sri Lanka but ask for sovereign guarantees if they can’t pay it like China did.
This could be a perfect opportunity for Pakistan to create an overseas base right beside india in the south. If they fail to pay back our loan (which looking at the situation they most likely will) we should takeover an airfield and make it and airbase and have it on 100 year lease. It’s also a perfect opportunity to get Sri Lankan business to shift to Pakistan and Sri Lankan intellects who can help us, shift to Pakistan. It might sound harsh but after all we’re a country we have to start thinking about our interests. When we’re an economy even the size of Indias we can start thinking about free aid etc but rn we simply can’t afford that. Giving aid to afghans technically isn’t free because it’s cheaper to feed afghans inside Afghanistan then let them free in Pakistan and we can’t go Rambo on the borders to keep them out cuz you know west just wants to catch us slipping and sanction us. If we want to progress something we have to take harsh steps like this.

 

[Bilal9]

@The Eagle bhai please move this thread to the Sri Lanka section or South Asia section.

My Thanks in advance.

 

[Leishangthem]

Yes china should write off billions of dollars of debt SL owes to them and also give up their 100 year long lease on SL's Port

Why not INDIA write off its billions of dollars of debt ?
India accounts for 9% of SL total external debt just one 1% behind China which accounts for 10% of SL external debt.

SL got 1.1 billion USD and 30 % stake in the port leashed, SL will have to return 1.1b paid for the leash(it wasn't free) if China returned the 70% stake for which it paid 1.1b usd.

 

[bluesky]

Tough times are part and parcel of every nation
Hope they come out strong from this crisis

However, SL has fallen to this level because of many prestige projects it undertook with the borrowed money from abroad.

A country should depend less on borrowings. It is the same as an individual. No country has ever developed by borrowing money from others. Self-help is the best.

I can foresee some other countries in our region will also face the same fate. It happened to almost all the Latin American countries. Even oil-producing Argentina is almost bankrupt.

When a country's leaders borrow, they do it for the sole purpose of stealing a part of the money. So, when it comes to repayment, the country finds no money in its coffer.