India’s RBI Extends $900 Mn To Sri Lanka To Tide Over Economic Crunch
Colombo, Jan 13: A week after inking of the Trincomalee Oil Tank Farms deal, Indian High Commissioner Gopal Baglay on Thursday met the Governor of Sri Lanka’s Central Bank and expressed New Delhi’s strong support to Colombo in the wake of the Reserve Bank of India extending US$900 million to the island nation to tide over its financial crunch.
The $900 million comprises deferment of an Asian Clearing Union settlement of over US$500 million and a currency swap of US$400 million.
Baglay conveyed to Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka, that these steps are in line with India’s strong commitment to stand with Sri Lanka for its economic recovery and growth.
“High Commissioner met Gov @CBSL and expressed #India’s strong support to #SriLanka in the wake of @RBI extending over USD 900 mn facilities over the last week.
“These comprise deferment of Asian Clearing Union settlement of over USD 500 mn and currency swap of USD 400 mn
“High Commissioner noted that these steps are in line with India’s strong commitment to stand with Sri Lanka for economic recovery and growth,” the Indian High Commission in Colombo posted.
Last Thursday, the two sides had inked an agreement to develop the Trincomalee Oil Tank Farms, paving the way for Colombo to receive an estimated $1.5 billion credit from New Delhi to boost its battered economy.
Indian External Affairs Minister S Jaishankar had also spoken on the phone with his Sri Lankan counterpart GL Peiris that evening, and conveyed that India is a reliable friend and “will support Sri Lanka in these difficult times”.
Today’s development comes days after Chinese Foreign Minister Wang Yi’s visit to Colombo, to push Beijing’s clout in the geopolitically strategic Indo-Pacific region.
The development also comes as Sri Lanka is negotiating another loan from China as part of attempts to restructure its debt repayment.
Central Bank Governor Ajith Nivard Cabraal told reporters that the loan amount has not yet been decided and that Sri Lanka hopes to reach an agreement with Beijing soon.
In Beijing, the Chinese Foreign Office spokesperson said that China has assured Sri Lanka of continued economic assistance.
Foreign Ministry Spokesperson Wang Wenbin said: “China has always been doing its utmost to provide help for Sri Lanka’s economic and social development and will continue to do so in the future.”
