Fighting financial crisis: Sri Lanka hopes for $2.5 billion rescue loan from China | India is blooming

Colombo: Sri Lankan officials are confident they will receive a $2.5 billion bailout loan from China as financial support to help it through the economic crisis it is facing, reported on Tuesday AlJazeera.

Sri Lanka’s Ambassador to China, Palitha Kohona, said Chinese authorities have assured her that they are arranging loans and lines of credit for the island nation.

Sri Lanka hopes to borrow $1 billion from Beijing to repay existing Chinese loans due in July, as well as a $1.5 billion line of credit to buy it goods such as textiles needed to support the garment export industry, he said.

Kohona said, “Given the current circumstances, there aren’t many countries that can get out there and do something and China is one of those countries that can do something very quickly.”

Sri Lanka is mired in its worst economic crisis since independence, with consumer prices rising 19%, the fastest in Asia last month.

Soaring costs, widespread power outages and shortages of food, fuel and medicine have led to violent street protests and left President Gotabaya Rajapaksa’s government in the minority in the country’s parliament.

Rajapaksa recently wrote to Chinese President Xi Jinping directly requesting credit support, Kohana said, and Sri Lankan officials hope Beijing will settle the matter as soon as possible.

Kohana further said that Sri Lanka had also requested China’s help in purchasing fuel which it was struggling to obtain due to the country’s shortage of foreign currency, but was unsure whether China can provide such support, given that it is itself a net importer of such goods.

(With UNI inputs)

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