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US$ 1.5bn emergency Indian credit facility for Lanka to fund essential imports
View(s):Another emergency Indian credit facility amounting to US$ 1.5 billion is in the pipeline for importing food, essential items, medicine and fuel from India as a forex shortage continued to restrict the country’s imports.
The matter was reviewed in detail when Finance Minister Basil Rajapaksa held a virtual meeting with India’s External Affairs Minister S. Jaishankar yesterday. They discussed ongoing bilateral economic and long-term partnerships.
This new facility is on top of the US$ 1 billion Indian credit facility to import food, essential items and medicine, along with the allocation of US$ 500 million for fuel.
The virtual meeting came as a follow-up to the in-person meeting Minister Rajapaksa had with Dr Jaishankar last month. Earlier Minister Rajapaksa was scheduled to meet Indian officials on the sidelines of the Vibrant Gujarat Global Summit this week but it was postponed due to increasing fresh covid cases.
The new credit facility came in the wake of extending US$ 400 million to Sri Lanka under the South Asian Association for Regional Cooperation (SAARC) currency swap arrangement and deferral of Asian Clearing Union (ACU) settlement of US$ 515.2 million by two months, to assist Sri Lanka. Recalling India’s longstanding cooperation with Sri Lanka, Minister Rajapaksa welcomed Indian investments in Sri Lanka in a number of important spheres including ports, infrastructure, energy, renewable energy, power and manufacturing and assured that conducive environment will be provided to encourage such investments.
“India will continue to support Sri Lanka in all possible ways for overcoming the economic and other challenges posed by the COVID-19 pandemic. As close friends and maritime neighbours, both India and Sri Lanka stand to gain from closer economic interlinkages,” India’s External Affairs Ministry said in a statement after the meeting.
Both Ministers noted that the recent steps taken by Sri Lanka for jointly modernising Trincomalee Oil Tank Farms will boost confidence of investors, apart from enhancing Sri Lanka’s energy security, the statement said.
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