India give support to Sri Lanka to overcome forex crisis

India has announced a USD 900 million loan to Sri Lanka to build up its depleted foreign reserves and for food imports, amidst a shortage of almost all essential commodities in the island nation. It must be noted that Sri Lanka is currently facing a shortage of almost all essential commodities due to a shortage of dollars to pay for the imports. India is extending its support through the Reserve Bank of India (RBI). The Indian High Commissioner to Sri Lanka Gopal Baglay met Cabraal and expressed India’s strong support to Sri Lanka in the wake of RBI extending over USD 900 million facilities.

These comprise deferment of Asian Clearing Union settlement of over USD 509 million and currency swap of USD 400 million. Sri Lanka is currently experiencing a shortage of almost all essentials due to a shortage of dollars to pay for the imports.

Additionally, power cuts are imposed at peak hours as the state power entity is unable to obtain fuel to run turbines. The state fuel entity has stopped oil supplies as the electricity board has large unpaid bills.The only refinery was shut as it was unable to pay dollars for crude imports.