World Desk, AnyTV, Colombo
Published by: Harendra Chaudhary
Updated Wed, 23 Feb 2022 04:36 PM IST
Summary
Sri Lanka got a big success in India. India agreed to provide currency swap assistance of $400 million to Sri Lanka. Apart from this, India has given assistance of $ 500 million for the purchase of fuel and $ 500 million for the purchase of food items from India. According to analysts, Sri Lanka has received a total of 2.4 billion dollars in aid from India.
Sri Lanka is on the verge of bankruptcy. Despite this, the Sri Lankan government has decided to stick to the policy of no delay in repaying the loan. Government sources say that the Gotabaya Rajapaksa government of Sri Lanka wants to maintain its credibility in the international financial market. For this the Sri Lankan government is resorting to ‘debt diplomacy’. Under this, it has recently obtained a big loan from India.
Foreign investors appreciated
It is said that this new policy has been made by the Governor of Central Bank of Sri Lanka, Ajith Nivard Cabral. Under this, a strategy has been decided to seek help from foreign lenders and investors. Cabral said clearly in an interview given to the website NikEasia.com – ‘I am determined to repay the loan on time. This is my duty. It is said that this policy has been appreciated by foreign investors. A prominent personality associated with the banking business told the website Nikkei Asia – We are understanding their interest. If you talk to the Sri Lankan authorities, none of them talk about defaulting.
Sri Lanka is currently facing a huge debt burden. In such a situation, trying to keep foreign investors and lenders happy is being considered a bold one. Sri Lanka’s record has been downgraded by three international credit agencies to the junk category. This stand by rating agencies has made it more difficult for Sri Lanka to manage its foreign exchange reserves.
The total economy of Sri Lanka is worth $81 billion. Its crisis deepened this year when only $1.6 billion was left in foreign exchange reserves. Apart from this, China gave him $ 1.5 billion through currency swap. Despite this difficult situation, the Sri Lankan government in January fulfilled its debt liability of $ 500 million. Analysts say that apart from paying off debt, another problem for Sri Lanka is the huge current account deficit. It needs $3 billion every year to bridge it.
big help from india
According to experts, in these circumstances, Sri Lanka has resorted to debt diplomacy. Under this, he is giving priority to taking bilateral loans from different countries. According to the news published in Sri Lankan newspapers, under this strategy, ministers and officials of the Rajapaksa government have traveled to many countries.
This month Sri Lanka got a big success in India. India agreed to provide currency swap assistance of $400 million to Sri Lanka. Apart from this, India has given assistance of $ 500 million for the purchase of fuel and $ 500 million for the purchase of food items from India. According to analysts, Sri Lanka has received a total of $ 2.4 billion in aid from India.
Meanwhile, the Rajapaksa government has sought more help from China. While China has a debt of $3.38 billion on it. Sri Lanka’s Central Bank Governor Cabral has said that his country has adopted a policy of not allowing its creditworthiness to be discounted so that other countries and lending agencies have no hesitation in giving it more loans.
Expansion
Sri Lanka is on the verge of bankruptcy. Despite this, the Sri Lankan government has decided to stick to the policy of no delay in repaying the loan. Government sources say that the Gotabaya Rajapaksa government of Sri Lanka wants to maintain its credibility in the international financial market. For this the Sri Lankan government is resorting to ‘debt diplomacy’. Under this, it has recently obtained a big loan from India.
Foreign investors appreciated
It is said that this new policy has been made by the Governor of Central Bank of Sri Lanka, Ajith Nivard Cabral. Under this, a strategy has been decided to seek help from foreign lenders and investors. Cabral said clearly in an interview given to the website NikEasia.com – ‘I am determined to repay the loan on time. This is my duty. It is said that this policy has been appreciated by foreign investors. A prominent personality associated with the banking business told the website Nikkei Asia – We are understanding their interest. If you talk to the Sri Lankan authorities, none of them talk about defaulting.
Sri Lanka is currently facing a huge debt burden. In such a situation, trying to keep foreign investors and lenders happy is being considered a bold one. Sri Lanka’s record has been downgraded by three international credit agencies to the junk category. This stand by rating agencies has made it more difficult for Sri Lanka to manage its foreign exchange reserves.
The total economy of Sri Lanka is worth $81 billion. Its crisis deepened this year when only $1.6 billion was left in foreign exchange reserves. Apart from this, China gave him $ 1.5 billion through currency swap. Despite this difficult situation, the Sri Lankan government in January fulfilled its debt liability of $ 500 million. Analysts say that apart from paying off debt, another problem for Sri Lanka is the huge current account deficit. It needs $3 billion every year to bridge it.
big help from india
According to experts, in these circumstances, Sri Lanka has resorted to debt diplomacy. Under this, he is giving priority to taking bilateral loans from different countries. According to the news published in Sri Lankan newspapers, under this strategy, ministers and officials of the Rajapaksa government have traveled to many countries.
This month Sri Lanka got a big success in India. India agreed to provide currency swap assistance of $400 million to Sri Lanka. Apart from this, India has given assistance of $ 500 million for the purchase of fuel and $ 500 million for the purchase of food items from India. According to analysts, Sri Lanka has received a total of $ 2.4 billion in aid from India.
Meanwhile, the Rajapaksa government has sought more help from China. While China has a debt of $3.38 billion on it. Sri Lanka’s Central Bank Governor Cabral has said that his country has adopted a policy of not allowing its creditworthiness to be discounted so that other countries and lending agencies have no hesitation in giving it more loans.