Update on financial aid from several countries to SL

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Several countries have come forward to provide financial assistance to Sri Lanka to deal with the current economic crisis in the country, Foreign Minister Prof. GL Peiris has said.

Prof Peiris told reporters yesterday that India would give Sri Lanka an additional US$500 million in financial aid to buy fuel.

According to Reuters, he further said that Bangladesh was also willing to postpone the US$450 million swap repayments to ease the burden on Sri Lanka.

“The IMF assistance will take about six months to reach us and it will come in installments. In the meantime, we must find funds to ensure the supply of our people with basic necessities,” explained the Minister of Foreign Affairs.

Meanwhile, China has announced that it will provide emergency humanitarian aid to Sri Lanka to help overcome the current difficulties.

The Chinese Embassy in Sri Lanka said the new financial aid to Sri Lanka was announced by the Chinese Ministry of Foreign Affairs and the International Development Cooperation Agency.

The embassy added that details of the financial assistance will be announced in the coming days.

The additional financial assistance to be provided by India will be the second of US$500 million that the country has provided in fuel credit to the Sri Lankan government.

The first line of credit was exhausted earlier this month after a shipment of 120,000 tons of diesel and 40,000 tons of gasoline. So far, India has provided nearly 400,000 tonnes of fuel.

In December last year, the Bangladesh Bank extended the validity of the credit facility it had extended to Sri Lanka for three months after the expiry of the first three months of the credit facility.

Bangladesh had extended the $200 million credit facility under a currency swap agreement with Sri Lanka and extended it in three tranches from August 2021.

In March 2022, Sri Lanka had requested another US$250 million currency swap from Bangladesh, announced at the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) held in Colombo.

Sri Lanka had reached out to China in March this year for a $1 billion loan and a $1.5 billion line of credit from China.

The Chinese Embassy in Sri Lanka said the additional $2.5 billion financial aid request comes on top of the $1.5 billion currency swap in 2021.

At the time, it was reported that the proposed US$1 billion loan requested from China would be used to settle previous loans taken by Sri Lanka from Chinese banks.

Sri Lanka is currently studying the possibility of rescheduling its debts with China.

In March, Sri Lanka also reportedly requested financial assistance from the Australian government.

Former Trade Minister Bandula Gunawardana had applied for a US$200 million line of credit from Australia to import lentils, milk powder and food products.

So far, Sri Lanka has sought financial assistance from four countries to deal with its worsening economic crisis. (NewsWire)

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