Colombo : India has announced a loan of over $900 million to Sri Lanka. This will help the country to increase foreign exchange reserves and import food.
Sri Lanka, which is going through an economic crisis, is currently witnessing a huge shortage of essential commodities. Sri Lanka’s Central Bank Governor Ajit Nivard Cabral said on Wednesday that his country is negotiating a USD 1 billion loan from India.
Indian High Commissioner to Sri Lanka Gopal Baglay met Cabral on Thursday and expressed India’s strong support to Sri Lanka in the wake of the RBI’s expansion of facilities worth over US$900 million last week.
These include the suspension of the Asian Clearing Association settlement of over USD 509 million and a currency swap of USD 400 million, it said in a tweet.
Commenting on India’s move, analysts said here that the Indian aid could contribute to Sri Lanka’s doubling of foreign exchange reserves announced at the end of December.