Categories: International

Sri Lanka receives a US$1 billion line of credit from India to assist pay for crucial imports

The Indian government has issued a USD 1 billion line of credit (LoC) for Sri Lanka to aid in the import of food, necessary products, and medication. On March 15, 2022, Sri Lankan Finance Minister Basil Rajapaksa will visit India to finalise the agreement. Sri Lanka is currently experiencing a serious economic crisis. India is extending the Line of Control as part of its efforts to aid its neighbouring country in combating the COVID-19 pandemic and mitigating its negative impact on its development aspirations.

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The island’s foreign reserves have dropped 70% in the last two years to $2.31 billion in February, stalling critical imports including of fuel. Finance Minister Basil Rajapaksa, who first announced the Indian credit line in February, will sign an agreement for it on Wednesday to pay for essentials including medicine, wheat flour, sugar and rice.

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