As Sri Lanka is facing a serious financial crisis, India has stepped up and pledged a whopping USD 2.415 billion to the island nation to help overcome dire financial constraints caused by external debt payments and a lack of US dollars in the country for business.
Earlier on Saturday, External Affairs Minister S Jaishankar held a virtual meeting with the Finance Minister of Sri Lanka Basil Rajapaksa. During the meeting, Jaishankar conveyed that India has always stood with Sri Lanka, and will continue to support Sri Lanka in all possible ways for overcoming the economic and other challenges posed by the COVID-19 pandemic.
To help Sri Lanka overcome its economic challenges, India under the SAARC currency swap arrangement has made an extension of USD 400 million to Sri Lanka and provided a deferral of ACU (Asian Clearing Union) settlement of USD 515.2 million by two months.
India’s critical support to Sri Lanka is due to the ongoing fuel crisis where the country is unable to purchase due to short of US dollars in the country, the Policy Research Group (PRG) said in its report.
It further stated that in 2022, Colombo must service over USD 7 billion in outstanding debt, including bond repayments of USD 500 million in January and USD 1 billion in July.