India extends $900 mn financial aid to Lanka

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New Delhi, January 14

India has extended over $900 million in loans to Sri Lanka over the last week, the Indian High Commission of Sri Lanka has said.

The assistance consists of deferment of Asian Clearing Union settlement of over $500 million and a currency swap of $400 million.

“These steps are in line with India’s strong commitment to stand with Sri Lanka for economic recovery and growth,” said the High Commission after a meeting between Indian High Commissioner to Sri Lanka Gopal Baglay and Central Bank Sri Lanka (CBSL) Governor Ajith Nivard Cabraal.

“Had an excellent discussion with Baglay at my office where he confirmed the SAARC Swap by the RBI and other forms of bilateral cooperation,” tweeted Cabraal.

The plummeting of tourism and an adventurist diktat banning chemical fertilisers has landed Sri Lankan in an economic mess, forcing it to not just seek bail-out loans, but acceding to demands from other countries for entry into its strategic sectors such as ports and strategic petroleum reserves. Under the agreement valid till November 13, 2022, the CBSL can draw multiple tranches of up to $400 million.