Sri Lanka firmed up a $1 billion credit line from neighboring India, a move that will ease a foreign exchange shortage for the nation even as it inches closer to an International Monetary Fund bailout.
The agreement, which includes aid for essentials like food and medicines, was signed between State Bank of India and the Sri Lankan government during Finance Minister Basil Rajapaksa’s visit to India Thursday.
#Agreement was signed between SBI and Government of Sri Lanka for $1 billion #credit facility for #procurement of food, medicine and other essential items to Sri Lanka. (2/2) pic.twitter.com/vfS1QHVSdX
— Ministry of Finance (@FinMinIndia) March 17, 2022
The aid comes at a time when a surge in oil prices, slower exports and a stunted tourism revival due to the war in Ukraine have jolted the $81 billion economy. President Gotabaya Rajapaksa said the government was in discussions with international financial institutions and friendly countries for repayment of loan installments, in an address to the nation on Wednesday.