Sri Lanka expects to rely more on India’s aid until IMF financing is agreed


Sri Lanka is counting on more aid from India until it secures an International Monetary Fund program that is expected to unlock aid from other lenders to help tackle the worst economic crisis in its history. independent.

The South Asian nation has been plagued by shortages of basic necessities, power cuts and runaway inflation, sparking calls for the ousting of President Gotabaya Rajapaksa. Prime Minister Ranil Wickremesinghe, who this week also assumed the role of finance minister, said on May 26 that he was considering speeding up talks with the IMF because the nation will need around $4 billion this week. year of the multilateral lender and creditors, including China. and Japan.

Sri Lanka’s High Commissioner to India, Milinda Moragoda, met with Finance Minister Nirmala Sitharaman in New Delhi on Friday and reiterated that the island nation will need bridge financing until the IMF program is finalized. .

“In this context, the Minister and the High Commissioner explored the possibility of increasing and restructuring the assistance provided by India in the form of credits for essential goods and fuel, as well as support for balance of payments,” the high commission said. his Facebook page.

Sri Lanka’s central bank governor Nandalal Weerasinghe told a committee meeting in parliament this week that talks with India were also underway for a swap facility of around $1 billion. the Reserve Bank of India.

Weerasinghe said the next three months will be the “biggest challenge” as the country faces currency shortages of around $500 million per month.

While Sri Lanka expects around $800 million to flow from ongoing World Bank and Asian Development Bank projects into emergency aid over the next six months, the country has so far largely depended on Indian credit for essential imports.

Dear reader,

Business Standard has always endeavored to provide up-to-date information and commentary on developments that matter to you and that have wider political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these challenging times stemming from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative opinions and incisive commentary on relevant topical issues.
However, we have a request.

As we battle the economic impact of the pandemic, we need your support even more so that we can continue to bring you more great content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are committed to.

Support quality journalism and subscribe to Business Standard.

digital editor


Comments are closed.