{"id":123874,"date":"2022-03-29T16:04:12","date_gmt":"2022-03-29T23:04:12","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=123874"},"modified":"2022-03-29T16:04:12","modified_gmt":"2022-03-29T23:04:12","slug":"india-china-bangladesh-to-help-sri-lanka-steer-economic-crisis","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2022\/03\/29\/india-china-bangladesh-to-help-sri-lanka-steer-economic-crisis\/","title":{"rendered":"India, China, Bangladesh to help Sri Lanka steer economic crisis"},"content":{"rendered":"

Courtesy Daily Sabah<\/em><\/span><\/h2>\n\n\n

India, China and Bangladesh have stepped in to help Sri Lanka weather a foreign exchange shortage that has forced it to devalue its currency amid soaring inflation, and to seek International Monetary Fund (IMF) assistance.<\/p>\n\n\n\n

Sri Lanka’s worst economic crisis in decades is a result of mismanaged government finances and ill-timed tax cuts, alongside the impact of the COVID-19 pandemic.<\/p>\n\n\n\n

With only $2.31 billion left in reserves, Sri Lanka has to repay debt of about $4 billion over the rest of this year, including a $1 billion-international sovereign bond that matures in July.<\/p>\n\n\n\n

Below is a look at external help Sri Lanka has received since last year:<\/p>\n\n\n\n

Bangladesh<\/strong><\/h3>\n\n\n\n

Last May, Bangladesh’s central bank agreed to a $200 million swap, the first swap arrangement between the two countries.<\/p>\n\n\n\n

IMF<\/strong><\/h3>\n\n\n\n

In August, Sri Lanka received its $787 million share of the global $650 billion Special Drawing Rights (SDR) allocation from the IMF. This was part of pandemic support extended by the lender and the funds were used to top up reserves.<\/p>\n\n\n\n

Foreign Minister Basil Rajapaksa is set to hold talks with the IMF in April.<\/p>\n\n\n\n

The island nation of 22 million people is struggling to pay for essential imports after a 70% drop in foreign exchange reserves over the past two years.<\/p>\n\n\n\n

China<\/strong><\/h3>\n\n\n\n

Last August, Sri Lanka received the last tranche of a $1.3 billion syndicated loan from the China Development Bank negotiated in 2020.<\/p>\n\n\n\n

Sri Lanka’s central bank received a $1.5 billion swap denominated in yuan in December, which was again used to top up reserves.<\/p>\n\n\n\n

Sri Lanka, which had drawn closer to China in recent years, ended 2021 with reserves of $3.1 billion.<\/p>\n\n\n\n

China is considering offering a $1.5 billion credit facility to Sri Lanka, besides a separate loan of up to $1 billion which the government has requested.<\/p>\n\n\n\n

China is Sri Lanka’s fourth-biggest lender, behind international financial markets, the Asian Development Bank (ADB) and Japan.<\/p>\n\n\n\n

India<\/strong><\/h3>\n\n\n\n

The Reserve Bank of India January announced a $400 million swap to help Sri Lanka shore up reserves, as part of an aid package the neighbors negotiated.<\/p>\n\n\n\n

Sri Lanka signed an agreement for a $500 million credit line to purchase fuel from India in February.<\/p>\n\n\n\n

The agreement proved critical as global oil prices soared after Russia invaded Ukraine and Sri Lanka’s fuel import costs jumped as much as 40% in a week.<\/p>\n\n\n\n

Fuel shortages have led to long lines at petrol stations and rolling power cuts across much of the country. Shipments from the Indian Oil Corporation began arriving around mid-March.<\/p>\n\n\n\n

In the same month, Sri Lanka and India signed a $1 billion credit line for importing essentials, including food and medicine.<\/p>\n\n\n\n

Sri Lanka has sought an additional credit line of at least $1 billion from India to help bring in essentials as shortages persist and protests break out.<\/p>\n","protected":false},"excerpt":{"rendered":"

Courtesy Daily Sabah India, China and Bangladesh have stepped in to help Sri Lanka weather a foreign exchange shortage that has forced it to devalue its currency amid soaring inflation, and to seek International Monetary Fund (IMF) assistance. Sri Lanka’s worst economic crisis in decades is a result of mismanaged government finances and ill-timed tax […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-123874","post","type-post","status-publish","format-standard","hentry","category-politics"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/123874","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=123874"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/123874\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=123874"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=123874"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=123874"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}