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Sri Lanka asks India for new $1 billion currency swap facility, deferred debt repayment

Our Bureau New Delhi | Updated on September 26, 2020 Published on September 26, 2020

Indian PM Narendra Modi with Sri Lankan PM Mahinda Rajapaksa (File photo)   -  Twitter/ @MEAIndia

Modi, Rajapaksa hold discussions on all economic projects

Sri Lanka has requested India for a new currency swap facility worth about $1 billion and a deferment of debt repayment, both of which are being discussed at the official level, and a mutual understanding on the issues would be arrived at shortly, the Ministry of External Affairs (MEA) said.

Prime Minister Narendra Modi and his Sri Lankan counterpart Mahinda Rajapaksa, in their virtual summit on Saturday --which lasted one hour, discussed strengthening of bilateral financial cooperation, reviewed the entire range of bilateral matters and exchanged views on regional and international issues of common concern.

Amit Narang, Joint Secretary, Ministry of External Affairs, in a press briefing after the meeting, said: “India has already provided a $400 million currency swap facility to the Central Bank of Sri Lanka in order to assist with economic recovery and to tackle the Covid-19 related disruptions. An additional request for a bilateral currency swap arrangement worth around $1 billion by the Sri Lankan side remains under discussion.”

Narang added, “Technical discussions on Sri Lanka’s request for debt deferment are going on and a mutual understanding may be arrived at shortly.”

On whether the fate of East Container Terminal (ECT) project in Colombo, which was to be jointly developed by India, Japan and Sri Lanka but was put on hold by the Sri Lankan government, was discussed between the two leaders. Narang said that there were positive and constructive discussions on all economic projects. “Both sides remain committed to these ventures. During the Summit, PM Modi expressed confidence that the new (Sri Lankan) government will take early and decisive steps for the implementation of these projects,” he said.

At the meeting, Rajapaksa expressed his firm resolve to use the opportunity provided by the strong two-third majority achieved by his SLPP led alliance in the last month’s Parliamentary elections to take India-Sri Lanka engagement to new heights.

Agreeing with him, Modi added that the current moment provided a unique opportunity for both countries to work more closely with each other in dealing with the economic impact of Covid-19 and deepening engagement on regional and international issues.

Modi also announced a grant assistance of $15 million for the promotion of Buddhist ties between the two countries. The grant will assist in deepening people-to-people linkages between the two countries in the sphere of Buddhism, through constructions and renovations of Buddhist monasteries, capacity development, cultural exchanges, archaeological cooperation, reciprocal exposition of Lord Buddha’s relics, strengthening of Buddhist scholarship, and supporting the clergy, the JS said.

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Published on September 26, 2020
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