Indian and China jointly rescue Sri Lanka

India and China are confirming the extension of financial help to rescue Sri Lanka from current financial crisis.

The Indian High Commission has confirmed USD 900 million financial facility including USD 400 million currency swap to Sri Lanka.

The High Commissioner met the Governor of the Central Bank and conveyed India’s support to Sri Lanka.

“High Commissioner met CBSL Governor and expressed India’s strong support to SriLanka in the wake of RBI extending over US$ 900 mn facilities over the last week. These comprise deferment of Asian Clearing Union settlement of over US$ 500 mn and a currency swap of US$ 400 mn,” the High Commission said in a tweeted.

Meanwhile, China said that Sri Lanka will ‘surely overcome the temporary difficulties as soon as possible and usher in renewed and greater development.

“It is believed that with the concerted efforts of the Sri Lankan government and people, the country will surely overcome the temporary difficulties as soon as possible and usher in renewed and greater development,” Chinese Foreign Ministry Spokesperson Wang Wenbin told media.

Chinese State Councillor and Foreign Minister WANG Yi assures that China will continue to do its best to provide all the necessary help and support to Sri Lanka.

Sri Lanka has to repay about $4.5 billion in debt this year starting with a $500 million International Sovereign Bond (ISB)maturing on Jan. 18.

A $1.5 billion yuan swap from China helped the island boost its reserves to $3.1 billion at the end of December.

Debt repayment to China in 2022 is likely to be smaller than its ISB commitments of $1.54 billion, at about $400 million-$500 million, a Sri Lankan finance ministry source told Reuters.

Sri Lanka’s central bank has repeatedly assured all debt repayments will be met and said funds for the January ISB has already been allocated.

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