Sri Lanka's Finance Minister Basil Rajapaksa to visit India this month

Colombo, March 8

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Sri Lanka’s Finance Minister Basil Rajapaksa will visit India this month, the Indian High Commission here has announced, amidst an unprecedented financial crisis in the island nation.

This announcement came after Rajapaksa spoke over the telephone with External Affairs Minister S Jaishankar on Monday.

A tweet from the High Commission said that India had assured Sri Lanka “support in all possible ways”.

Rajapaksa’s visit has been on hold since late February.

Sri Lanka was to seal a one-billion-dollar loan from India during the Rajapaksa visit. The local media reports said India had set tough conditions for the loan including probing Sri Lanka over its plan to overcome the current economic crisis.

Sri Lanka has suffered shortages of almost all essentials due to import difficulties caused by the forex crisis.

India granted Sri Lanka a much-wanted economic relief package in January.

In January, Jaishankar and Rajapaksa had a virtual meeting and they discussed projects and investment plans by India that would strengthen the economy of Sri Lanka.

In a statement on the meeting, the Ministry of External Affairs had said Jaishankar conveyed that India had always stood with Sri Lanka, and will continue to support Sri Lanka in all possible ways for overcoming the economic and other challenges posed by the Covid-19 pandemic.

Meanwhile, the Central Bank here announced on Monday that to achieve stability in inflation, the external sector, financial markets and rural economic activity, it will lift the rupees 200 peg on the dollar allowing it to be transacted up to 230 to the dollar.

Commenting on the bank’s decision, well-known economist and central banker WA Wijewardena said more flexibility was required.

“The appropriate rate would be the one which reduces the premium in black market rate to rupees 2”, he tweeted.