Sri Lanka to receive $ 1 billion loan from India to alleviate food and medicine shortages

India has reportedly agreed to provide a $ 1 billion loan to Sri Lanka, as a solution to the dollar shortage, for the import of essential food items and medicines.

According to government sources, the loan will be given not as cash but as a loan facility for goods imported from India, Sinhala daily Lankadeepa reported.

It is learned that in addition India has agreed to provide US $ 500 million loan for fuel purchases and US $ 400 million as an exchange loan.

The loan facility will be provided as a result of a discussion held by the Minister of Finance Basil Rajapaksa with the Indian authorities during his recent visit to India.

Meanwhile, government sources said that a loan of US $ 1.500 billion was received from China recently and that a loan of US $ 500 million is to be received from Qatar on a one-year repayment basis.