Sri Lanka secured a $1bn credit line from India as IMF signals help

Sri Lanka secured a $1bn credit line from India as IMF signals help

Officials report that in a bid to buy food and medicine, Sri Lanka has received a $1bn credit line from India, meanwhile, IMF announces that it will consider a possible bailout.

On Thursday, Treasury Secretary Sajith Attygalle told reporters in Colombo that India and Sri Lanka have formally entered into the credit agreement during finance minister Basil Rajapaksa’s visit to New Delhi.

India’s foreign minister Mr S. Jaishankar said on Twitter, “India stands with Sri Lanka. the US $1 billion credit line signed for the supply of essential commodities”.

Meanwhile, IMF spokesman Gerry Rice said in a statement to reporters in the capital, “We will discuss with the authorities how best we can assist Sri Lanka going forward”. He also said that IMF has highlighted the urgent need for Sri Lanka to implement a “credible and coherent strategy to restore macroeconomic stability and debt sustainability”.

The country is suffering from its worst economic crisis since its independence in 1948. It is facing a crippling shortage of essentials and fears that it will default on its foreign debt or might ask the bondholder to take a “haircut” on repayments.

Recently, a $500 million loan was provided by the Indian credit line to help Sri Lanka buy oil.